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NZ GDT auction preview: What to expect in NZD/USD?

FXStreet (Mumbai) - The NZD/USD pair is trading moderately higher on the day ahead of the Fonterra’s Global Dairy Trade auction due later today.

Kiwi on a strong footing

The NZD has gained almost 6% so far this month mainly on account of a sharp drop in the Fed rate hike bets and signs of resurgence in the dairy product prices. The NZD/USD pair bottomed out at 0.6236 in September, before recovering to a high of 0.6897 levels on Oct 15.

GDP auction – prices expected to consolidate

GlobalDairyTrade auction is widely expected to see a consolidation in prices following four consecutive increases, after nearly six months of declines. The milk prices have seen resurgence off late and that kept NZD on a positive footing.

Consequently, flat prices at the GDT auction could result in profit taking on the NZD longs. In case, prices tick higher in the auction, then the pair may revisit its Oct 15 high of 0.6897 levels.

NZD/USD Technical Levels

The pair currently trades around 0.6813. The immediate resistance is located at 0.6897 (Oct 15 high), followed by a hurdle at 0.6970 (50% of 0.7744-0.6917). A break above the same could happen in case the GDT auction results in higher prices, pushing the pair to 0.7047 (200-DMA). On the other side, support is seen at 0.6788 (38.2% of 0.7744-0.6917), under which the pair could drop to 0.6741 (23.6% of 0.6236-0.6897). A break below the same could happen in case GDP auction results in lower prices, pushing the pair to 0.6645 (38.2% of 0.6236-0.6897).

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