24 Jul 2014
NZD/USD staring at 0.86 from the rear mirror
FXStreet (Bali) - NZD/USD cracked the 0.86 round number ahead of European hours, posting its lowest for the session, and since June 12, at 0.8580.
The ongoing slide in the currency follows a very aggressive language by the RBNZ Governor Wheeler, who not only signaled a pause to the tightening cycle, but also stepped up the rhetoric towards the Kiwi, noting that "the exchange rate has yet to adjust to weakening commodity prices", adding that "the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall."
As the flow of sell orders keeps pouring in, there is no visible support until 0.8560-65 (point of origin from the big rally off June 11, as seen in an H4 chart), therefore, expect the zone 0.8565-0.85 to provide stronger support. On the upside, 0.86 is immediate resistance now, with momentum traders expected to perceive the area of value to reinstate shorts, ahead of 0.8635 (double bottom June 16-19) ahead of 0.8650.
The ongoing slide in the currency follows a very aggressive language by the RBNZ Governor Wheeler, who not only signaled a pause to the tightening cycle, but also stepped up the rhetoric towards the Kiwi, noting that "the exchange rate has yet to adjust to weakening commodity prices", adding that "the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall."
As the flow of sell orders keeps pouring in, there is no visible support until 0.8560-65 (point of origin from the big rally off June 11, as seen in an H4 chart), therefore, expect the zone 0.8565-0.85 to provide stronger support. On the upside, 0.86 is immediate resistance now, with momentum traders expected to perceive the area of value to reinstate shorts, ahead of 0.8635 (double bottom June 16-19) ahead of 0.8650.