NZD/USD: Risk has swung towards deeper retracements into mid-2017 - Westpac

Tim Riddell, Research Analyst at Westpac, explains that although support is evident between 0.6860 and 0.6890 for NZD/USD pair, the sharpness of the slide from 0.7055 and the turn lower in daily momentum suggest deeper declines.

Key Quotes

“A swift regaining of levels above 0.6985 is needed to avoid a potential flush towards the 0.6715-30 area.”

“Weekly

• Weekly momentum may be at neutral levels but has a declining bias. The failure to regain channel support (above 0.7100) underscores this downside bias
• Further slippage below 0.6890 could trigger a period of deeper retracements to define range support into mid-2017”

“Monthly

• The break of channel support and neutral to negative monthly momentum opens the risk of deeper retracements into 2H’17
• However, longer term patterns still suggest that such retracements will define consolidation support within a broad 0.6500-0.7250 range”