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The New Zealand dollar continued its decline against the US dollar as the negative sentiment in the market encouraged the New Zealand dollar sellers to take the NZDUSD pair lower. The economic release in the US also favoured the US dollar, as the US housing starts and building permits data exceeded the expectation yesterday. This resulted in a sharp downside in the NZDUSD pair. Earlier during the Asian session, the New Zealand dollar sellers got aggressive and took the pair to a new monthly low below the 0.8400 support area.
There is an important bearish trend line formed on the hourly chart for the NZDUSD pair, which might act as a strong hurdle for the pair in the short term. The mentioned trend line is coinciding with the 38.2% fib retracement level of the last down-move from the 0.8514 high to 0.8372 low. So, if the pair moves a bit higher from the current levels, then it is likely to find sellers around the 0.8420-25 resistance area. If the pair manages to break the mentioned resistance area, then it could open the doors for a move towards the 61.8% fib level, which also coincides with the 200 hourly moving average.
The hourly RSI has managed to close above the 50 level, which is a positive sign in the short term. However, one cannot deny that the pair is under bearish pressure, which can take the pair towards the 0.8320 support area. Initial support can be seen around the 0.8360, followed by the 0.8320 level.
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Overall, selling rallies remain a good option as long as the pair is trading below the 0.8425 level.
Posted By IKOFX Technical Team: Online Forex Broker