NZD/USD: more downside to follow from here, eye son 0.6880?
NZD/USD: reflations trade at risk, commodities under pressure.
NZD/USD NZD/USD has been hurt on dollar strength as the reflation trade comes under pressure once again, and if was not for the price of oil on the Iran risk, the commodity FX could well have been under further pressure, bringing in the 70 cents levels into vogue for Kiwi traders. Currently, NZD/USD is trading at 0.7035, down -0.70% on the day, having posted a daily high at 0.7091 and low at 0.7034.
Fundamental/political wrap: reflation trade under pressure, dollar goes bid
NZD/USD opened around 0.7055 after pair lost its footing early on in the European shift and bears stayed on top as NY got going with a strong dollar. Then, risk soured and stocks dropped, (after an initial bullish gap on McDonald’s revenue and profit report), making for a new trend low to 0.7033 as the yen picks up a strong bid, sending NZD/JPY lower and weighing on the Kiwi.
What are Bank analysts saying?
“With US inflation on track to justify further Fed tightening, equity markets are wobbling and the USD is finding more support, and a key level in the Dollar Index (200-day moving average) is fast approaching. That has put the NZD back on the defensive, and a move back below 70 cents is now easily on the cards,” explained analysts at ANZ.
Despite last week’s closing bull hammer on the daily sticks, technically, there is a bearish bias now that a new low has been set accompanied with the RSIs biased to the downside as well. Support is at 0.6880 and resistance is at 0.7180.
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