- NZD/USD failed to hold break into daily cloud on Friday's trade.
- The pair closed below the cloud and is extending weakness on the day.
- Downward revision of the inflation forecasts only added fuel to downside in the pair.
- The New Zealand Institute of Economic Research (NZIER) revised its 2017/18 inflation forecasts to 1.1% (previous 1.5%), while growth forecast was revised slightly lower to 2.9% (previous 3.1%).
- The inflation is seen rising 1.9% in 2018/19 as opposed to the previous forecast of 2%, while the growth forecast has been revised higher to 3.4% from 3.1%.
- Price action now hovers around 20-DMA at 0.7239, downside is holding weekly 20-SMA support at 0.7225.
- We see further weakness on break below weekly 20-SMA, drag till 200-DMA at 0.7136 then likely.
Support levels - 0.7239 (20-DMA), 0.7235 (5-DMA), 0.7225 (Weekly 20-DMA)
Resistance levels - 0.73, 0.73373 (Double top), 0.7391 (weekly 200-SMA), 0.7416 (Aug 7 high)
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