FxWirePro: NZD/USD pauses downside at 21-EMA support, break below will drag the pair lower

NZD/USD chart - Trading View 

Spot Analysis:

NZD/USD was trading 0.06% lower on the day at 0.7068 at around 10:30 GMT

Previous Week's High/ Low: 0.7158/ 0.7075

Previous Session's High/ Low: 0.7139/ 0.7059

Fundamental Overview:

Upbeat US Retail Sales data which jumped to a 5-month high MoM and risk-off sentiment keep the greenback bid across the board.

The US Retail Sales MoM surpassed expectations of -0.8% with +0.7% in August. 

Further, the Philly Fed business sentiment index also rose strongly to 30.7 versus 19 forecast and 19.4 prior, marking the strongest figures in three months.

Additionally, the US-China tussles, along with the hurricanes, challenge oil firms in the US Gulf to add to the risk-off mood and favor the US dollar’s safe-haven demand.

Investors now look to the Fed’s latest policy decision, due to be handed down next week, for further timeline clues.

Technical Analysis:

- Price action was rejected at channel top and is extending break below 200-DMA

- Downside has breached into daily cloud, but has held support at 21-EMA, breach below will drag the pair lower

- Momentum is turning bearish, RSI is now trending lower, but holds above the 50 mark

- Stochs have rolled over from overbought levels and are now biased lower

- GMMA shows minor trend is turning bearish, while major trend is neutral

Major Support and Resistance Levels:

Support - 0.7060 (21-EMA), Resistance - 0.7116 (200-DMA)

Summary: NZD/USD rejected at channel top, slips below 200-DMA. Price action has retraced into the daily cloud. 

Downside is now pausing at 21-EMA support. Break below will plummet prices. Focus on US FOMC meeting for impetus. 

On the flipside, decisive break above 200-DMA and channel top will buoy bulls in the pair.