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NZD/USD: RBNZ adds early pressure, buying dips still notable

FXStreet (Bali) - NZD/USD's sellers successfully stepped in to protect a penetration through 0.80 round number on Thursday, with the pair initially sliding towards 0.7890 only to recover the bid tone on buoyant US stocks, still ending -0.37% down on the day, but well off lows.

The main USD driver on Thursday, helping to see an abrupt turnaround in risk - NZD positive - were comments from Fed's Bullard (hawk!) noting that “inflation expectations are declining in the U.S,” adding “that’s an important consideration for a central bank, and for that reason I think that a logical policy response at this juncture may be to delay the end of the QE.” These remarks caught the market completely wrong-footed. Just in the last minutes, RBNZ said NZ currency level remains unjustified and unsustainable, which added pressure to the NZ Dollar in early Asia, although the dip was quickly bought

In the last NZD/USD article along Asian hours - NZD/USD testing critical 0.80, regains 20-DMA - some technical arguments were presented for what appears to be an improving bullish environment, without forgetting that mid term/macro offers will probably be lining up higher, although clusters not expected to be too aggressive until 0.81/8130 (horizontal support/38.2 fib July-Oct decline). Wednesday's 20-day EMA being reclaimed - first time since July 16th - and the recent drop being bought up at that same 20-day EMA juncture, keeping the NY close price above it, telegraphs a potential continuation of intraday bullish dynamics. That said, a break below 0.78 would probably see trend lows being re-visited and negate the ST bull case.

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