NZD/USD heavy, set to test 0.6700

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 7, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - NZD/USD is seen posting size-able losses as we progress towards the mid-Asian trades, and is likely to emerge the worst performer this session.

    NZD/USD trades below daily pivot

    Currently, the NZD/USD pair trades -0.52% lower at fresh session lows at 0.6709, failing to resist 200-DMA at 0.6784. The Kiwi halted is 2-day rally and reversed almost half of Friday’s rise as the bears jumped back in the game amid growing expectations of RBNZ rate cut this week. Markets are pricing in around a 50% possibility that the RBNZ will slash the cash rate to 2.50% on Thursday, on the back of softer inflation outlook and lower dairy prices.

    Moreover, the recent decline in Oil prices after OPEC’s meeting last Friday ended with no production and poured cold waters on the expectations of output cut, also weighs on the resource-linked Kiwi. While broad based US dollar strength in the run up to the Fed showdown next week further adds to the bearish pressure on NZD/USD.

    Meanwhile, the Antipode is expected to get influenced by a set of Chinese macro releases and the key RBNZ rate decision scheduled later this week.

    NZD/USD Levels to consider

    To the upside, the next resistance is located at 0.6732/35 (daily pivot/ 1h 10-SMA), above which it could extend gains to 0.6784 (200-DMA) levels. To the downside immediate support might be located at 0.6683 (1h 50-SMA) below that 0.6648 (50-DMA).
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