After shooting very high after the No-Taper decision by the Fed, NZD/USD retraced its rise and changed course. This fall is becoming an avalanche.
New Zealand posted a higher than expected deficit for the month of August: nearly 1.2 billion instead of around 700 million expected. This sent the pair to the lows of 0.8220. Where next?
The RBNZ is certainly delighted with the outcome: it recently tried to talk the kiwi down, and this time without success. The recent worries about a possible “Octaper†– an announcement about reducing bond buys by the Fed at its October meeting, allowed the pair to drop.
Here is the NZD/USD daily chart:
Further global worries also weighed heavily, and the big trade deficit already brought the pair close to support at 0.8210. The upside move was overdone, so the fall afterwards was not a huge surprise.
Below, 0.8160 is already an important line – it was both a peak in August and the cap line just before the Fed. Lower, 0.81 is another point of support. The next line is already below the round number of 0.80: 0.7970.
On the topside, 0.8280 will now work as resistance, and it is backed by the stronger line of 0.8350.
