Look beyond ordinary analysis
Currently, NZD/USD is trading at 0.7010, up 0.04% on the day, having posted a daily high at 0.7014 and low at 0.6999.
US dollar index consolidates at 13-year highs after FOMC minutes
NZD/USD has shown an early bid in early Asia after a phase consolidation of the strong sell off from 0.7050 region overnight. The dollar found decent bid again ahead of the FOMC minutes that left question marks over the commitment of the Fed for a Dec hike and where otherwise markets have priced in a 25bp move. The data was strong for the US economy today and fell into rate hike category, while members of the FOMC have been advocating for a rate hike even to maintain credibility in the markets.
For the session ahead, analysts at Westpac suggested that the bird is vulnerable to falling below 0.6990 given the stronger US dollar. The analysts also offered NZD/USD in a 1-3 month outlook: “The US dollar has had an impressive rise since the US election and has potential to rise further, not least because the Fed will probably hike in December. Against that, the NZ economy is strong and dairy prices have risen. Overall we are left with a bearish outlook for NZD/USD, targeting sub-0.70. Technicals suggest as low as 0.66 could be seen, courtesy of the head-and-shoulders break below 0.7060.”
Spot is presently trading at 0.7011, and next resistance can be seen at 0.7014 (Daily High), 0.7029 (Hourly 20 EMA), 0.7030 (Daily Classic S1), 0.7031 (Daily 200 SMA) and 0.7042 (Hourly 100 SMA). Next support to the downside can be found at 0.7008 (Daily Open), 0.7008 (Monthly Low), 0.7008 (Weekly Low), 0.7003 (Daily Classic S2) and 0.6999 (Daily Low).
Source: Fx News
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