It is certainly not been a good week for the kiwi whatsoever. Not only did the RBNZ’s dovish tilt weigh on the currency, the more negative risk mood in markets also compounded the declines in the past few sessions. Add in a stronger dollar to the equation, and NZD/USD sellers are indeed looking for a downside break after a couple of months of consolidation:
The pair had been ranging somewhat between 0.6100 to 0.6300 mostly with a couple of attempts in early April and mid-May to chase a move towards 0.6400. Those ultimately faltered and now with a break back below 0.6100 – the lowest levels since November last year, we could see the downside momentum gather pace.
The next key target will be the 50.0 Fib retracement level around 0.6025 with the 0.6000 mark also in focus for sellers.
A lot will hinge on the daily and weekly closes today and tomorrow respectively, so just keep an eye out for that and how that will play into the technical picture for the pair.
But with the dollar continuing to stay more poised across the board and risk sentiment still looking skittish outside of tech stocks, it isn’t boding well for the kiwi as we look towards the latter stages of the week.
This article was written by Justin Low at www.forexlive.com.
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