NZD/USD drops further towards 0.6400 post-China GDP

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 19, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - A sudden bout of selling-interest hit the NZD/USD pair following the release of China’s GDP data, sending the Kiwi sharply lower from 5-DMA to session lows ahead of 0.64 handle.

    NZD/USD meets supply at 5-DMA (0.6451)

    Currently, the NZD/USD pair drops -0.47% and trades near fresh session highs printed at 0.6416 some minutes ago. The Kiwi ‘s overnight recovery fizzled near 0.6470 region, with the prices running through fresh offers after the Chinese GDP data disappointed markets and refuelled China slowdown fears. Thus, a major turnaround in risk-sentiment was witnessed post-Chinese macro releases, weighing heavily on the NZD. China is New Zealand’s top export destination and hence, slower pace of China’s economic growth raises concerns over the country’s external demand.

    Further, with equities also reverting to the red zone as markets digest dismal Chinese data, the demand for higher-yielding currencies reduce and adds to the downside in the Kiwi pair. Meanwhile, markets now shift their attention towards Fonterra’s dairy auction results due later tonight for fresh cues on the NZD.

    NZD/USD Levels to consider

    To the upside, the next resistance is located at 0.6451 (1h 20-SMA/ 5-DMA), above which it could extend gains to 0.6493/ 0.6500 (10-DMA/ round number) levels. To the downside immediate support might be located at 0.6416/07 (daily low/ S1) below that 0.6379 (Jan 15 Low).
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