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FxWirePro: NZD/USD sold-off for 6th consecutive session, divergent monetary policy outlook weighs

  • NZD/USD heavily sold-off into divergent monetary policy outlooks between the Fed and RBNZ.
     
  • Market pricing only 50% chance of a RBNZ rate hike in November.
     
  • On the other side recent streak of upbeat US economic data coupled with hawkish Fed speaks bolstered March Fed rate hike bets.
     
  • Kiwi also suppressed by downbeat Chine services PMI data, which showed China's services sector expanded at the slowest pace in four months.
     
  • US ISM services data and a flurry of Fed speaks due later on Friday in focus for further direction in the pair. 
     
  • Technical studies are heavily bearish, we see scope for test of 0.6930 (trendline support). Violation there could see 0.68 levels.
     
  • Price action has dipped below daily cloud and has broken below 200-DMA. 

Support levels - 0.70, 0.6972 (78.6% Fib and Nov 24 low), 0.6930 (trendline)

Resistance levels - 0.7084 (cloud base), 0.71, 0.7125 (5-DMA), 0.7147 (200-DMA)

TIME  TREND INDEX  OB/OS INDEX    

1H          Bearish               Oversold       
4H          Bearish               Oversold       
1D          Bearish               Neutral        
1W         Bearish               Neutral  
    
Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-breaks-below-200-DMA-good-to-go-short-on-rallies-568535) has hit all targets.

Recommendation: Book partial profits at lows, lower trailing stop to 0.7150, target 0.70/ 0.6975/ 0.6930.

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -79.5653(Bearish), while Hourly USD Spot Index was at 134.846 (Highly bullish) at 0640 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
 

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