NZD/USD trades to the lows for the day at 0.7086

NZD/USD D1 23-03
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The central bank is still some ways off from hiking rates, so perhaps macroprudential measures are the way to go there – in some sense, a more dovish stance.

But again, this is applicable to just one sector/element of the economy.

Looking at NZD/USD, the erosion of the technical picture may also be a factor here. The pair is trading down 1% on the day and is breaking a few key support levels now.

Of note, the pair is tracking below the trendline support @ 0.7122, the 100-day moving average (red line) @ 0.7124, the 38.2 retracement level @ 0.7101, and the 18 January low @ 0.7096 as we start to move towards European morning trade.

In particular, the 100-day moving average @ 0.7124 and the 18 January low @ 0.7096 are key levels to watch ahead of the close today.

The pair has not really tracked below the former besides for a brief period in late October last year. But I would argue that there has not really been a firm break below the key level since May last year – when the kiwi was recovering from the March selloff.

As such, breaking below those key levels mentioned above leaves very little room for buyers to make a stand all the way through to 0.7000 next with the 7 and 12 December lows seen in the region of 0.7003-06 as well.

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