NZD/USD drops further to test 100-DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 6, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The New Zealand dollar continues to get battered by its American rival for a third day today, knocking-off NZD/USD to fresh five-week lows below 200 & 50-DMA.

    NZD/USD: Boasts 3-black crows on daily charts

    Currently, the NZD/USD pair drops -0.90% to 0.6643, flirting with fresh multi-week lows struck at 0.6633 in the last hours. The bearish pressure on the Kiwi keeps increasing as we progress towards the second half of this week, as the deteriorating risk conditions triggered by another China yuan devaluation continue to dampen the sentiment around the higher-yielding currencies such as the NZD. Meanwhile, China’s Caixin services PMI dropped to 50.2 in Dec versus 51.2 in Nov, and hit 17-month low.

    Moreover, the New Zealand dollar remains under pressure against the greenback after yesterday’s Fonterra dairy auction results showed another drop in the dairy prices, which reinforced further easing bets by the RBNZ later this month.

    Meanwhile, markets continue to digest the Chinese economic news and now look forward to a slew of US data due later in the NY session for further momentum.

    NZD/USD Levels to consider

    To the upside, the next resistance is located at 0.6678/83 (50 & 200-DMA), above which it could extend gains to 0.6700 (round number) levels. To the downside immediate support might be located at 0.6623 (100-DMA) below that 0.6592 (Dec 12 Low).
    For more information, read our latest forex news.

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