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NZD/USD downside bias below 20 DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 29, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Guatemala) - NZD/USD remains within familiar ranges post the RBNZ decisions to leave rates on hold with the door open to further cuts at a later stage.

    The price has also been driven with the hawkish FOMC this week who also left policy unchanged, but offered indications that they may be getting closer to starting to raise interest rates, potentially in December.

    The price is comfortable at the higher end of the 0.66 handle supported by the 20 SMA on the hourly sticks that is currently at 0.6679. The greenback is back in vogue however and the bird trades with a bearish bias on the divergence between the two Central Banks.

    The RBNZ is concerned about headwinds from China and East Asia while the FOMC removed such remarks from this FOMC statement time around, signalling that when jobs are maximised and when the committee are more confident on inflation moving towards their 2%, they will be ready for lift-off.

    Full text October FOMC statement

    NZD/USD levels

    Technically, the 20 DMA has been broken in recent price action. Next support to the downside below the 0.66 handle comes as 0.6580. The 200 DMA at 0.7013 leaves a bearish cloud over the bird and minor recoveries on the same time frame are too shallow still, despite a break above the 55 DMA at the start of October.
    For more information, read our latest forex news.

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