NZD/USD: Downside retracements likely to redefine range support - Westpac

Momentum appears to have based as NZD/USD approached 0.6845-50 (50% of the range since 2015) and so the scale of rebounds is now of increased interest, suggests Tim Riddell, Research Analyst at Westpac.

Key Quotes

“Prior congestion/retracement around 0.7000-25 may well cap interim rebounds and so suggest consolidation rather than any reversal off the recent 0.6850 low.”

“Weekly

Weekly momentum has reached levels that previously indicated range defining support, however, the indicators are not yet showing signs of turning

Should rebounds falter (as intimated above) around 0.7000-25, a further leg lower could easily develop to test the deeper retracement zone of 0.6675

“Monthly

• Monthly momentum remains neutral, suggesting that the broad consolidation is set to continue. However these indicators have a downside bias at present
• Although price action over the past two years is seen as corrective, patterns still suggests another spike lower before NZD can form base for a sound rebound”