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NZD/USD downside prevailing below key 0.79 handle

FXStreet (Guatemala) - NZD/USD is trading at 0.7848, down -0.40% on the day, having posted a daily high at 0.7913 and low at 0.7846.

NZD/USD has drifted to the downside in a continuation of supply that was met by Friday’s highs up to the 0.7940’s. Meanwhile, markets are awaiting the RBNZ’s inflation expectations report coming up and this will be keenly monitored while else where we get the Q3 GDP report from the US as a key data release. However, much will depend from here on with the Fed driven uptrend for the US dollar while markets will continue to move away from the NZD on lower dairy prices.

Moreover, the downside will continue to be at risk in the NZD if there continues to be a divergence between the RBNZ and Fed in respect of interest rate policy and as Imre Speizer, analyst at Westpac Banking Corporation ABN suggested, “Inflation at the bottom of the RBNZ’s 1%-3% target band will keep the RBNZ on hold for at least the year ahead (the market is pricing no more hikes until Dec 2015), which means the NZ-US interest rate differential is vulnerable to falling further”.

NZD/USD noteworthy levels

Current price is 0.7849, with resistance ahead at 0.7859 (Daily 20 SMA), 0.7862 (Weekly Low), 0.7879 (Hourly 20 EMA), 0.7881 (Hourly 100 SMA). Next support to the downside can be found at 0.7835 (Daily Classic S1), 0.7799 (Weekly Classic S1) and 0.7790 (Daily Classic S2).

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