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NZD/USD: time maybe up for bulls on 0.68 handle

FXStreet (Guatemala) - NZD/USD formed another red daily stick last week as the bullish trend from last September's minor recovery begins to slow down on the 0.68 handle with price testing there at time of writing.

The greenback was outperforming on the back of CPI and prospects of a Fed hike by the end of the year. We also had New Zealand CPI last week which came in at 0.4% y/y, 0.3% on the quarter, potentially forcing the hand of the RBNZ yet again and that divergence between the two central banks will continue to be an obstacle for the bulls, monitoring China and commodity prices. Later today comes with Q3 Chinese GDP expected.

Fed and RBNZ divergence weighs on bird

NZD/USD garnered some immediate demand on the back of CPI's, but the sellers came in and stamped on the bulls efforts while markets simply do not regard the RBNZ in a position of being able to hold off the headwinds for much longer and are pricing in another a rate cut by the end of the year. The commodities sector will come under even more scrutiny as will China over the next few weeks, from both the respect of the RBNZ and FOMC.

NZD/USD levels

Technically, NZD remains in a bullish trend and trades with a negative bias below the pivot of 0.6828 today at current spot of 0.6803. 0.6890 resistance capped the pair ahead of R2 at 0.6938. The price has dropped away below the 50 SMA on the hourly chart with the 20 crossing down placed at 0.6810 on the same time frame. MA's with RSI (14) back below 50. Downside levels below 0.68 come as 0.6740 ahead of 0.6706.

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