Technical Bias: Bearish
Key Takeaways
• New Zealand dollar tumbles against the US dollar post solid US ISM non-manufacturing PMI.
• New Zealand’s global dairy trade auction registered a fall of -8.4%, which weighed on the kiwi buyers.
• NZDUSD support seen at 0.8347 and resistance ahead at 0.8500.
The NZDUSD pair declined heavily recently due to a number of reasons. The RBNZ intervention fears along with fall in New Zealand’s global dairy trade auction causing a panic and taking the pair lower.
Fall In The Unemployment Rate
The New Zealand employment report was published by the Statistics New Zealand. The unemployment rate fell from 5.9% to 5.6%, which was very bullish for the New Zealand dollar. However, the employment change in the second quarter was 0.4%, and the forecast was of 0.7%. The NZDUSD pair was seen trading lower after the release.
Technical Analysis
The NZDUSD pair breached the 200-day simple moving average recently, and managed to settle below it. This can be seen as a bearish sign, which can ignite more losses in the near term. Moreover, the pair also broke an important bullish trend line on the daily timeframe. Currently, the pair is trading around the 50% Fibonacci retracement level of the last leg higher from the 0.8050 low to 0.8828 high. If the pair closes below the same, then a move towards the 61.8% fib level is possible in the short term. However, the daily RSI is around the extreme levels, which means there can be a correction any time, but the broken 200-day SMA might act as a hurdle for the pair moving ahead.
Overall, as long as the pair is trading below the 200 SMA (4H) the chance of a move lower is high. However, if the pair settles above the mentioned moving average, then a move towards the 0.8550-80 resistance area is possible moving ahead.
