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NZD/USD downside about to play out below 1hr 20 SMA?

FXStreet (Guatemala) - NZD/USD downside is starting to play out with a test of the 20 SMA on the hourly charts on a broad minor recovery in the greenback.

Judging by the lack of follow through on the GDP Q3 for Aus, markets are overly short in the greenback for one 24hr session and nerves are mounting at potentially unsustainable levels in the antipodeans in the wider scheme, where both the kiwi and Aussie are testing the descending resistance lines on respective bearish trends.

Fundamentally, the Kiwi, surprisingly, only garnered a little support in the GDT price index while the US data allowed dollar bears a bite in of the greenback with the worst headline print since 2009 in a continuation of contractions in the US manufacturing sector vs a robust jobs market and stronger services sector.

Markets now turn to Lockhart speaking on the economy, before Yellen ( expected to hammer home the gradual normalisation message) and Williams of the Fed ahead of the Nonfarm Payrolls showdown at the end of the week. The ADP report could be a showcase for that report and might garner more activity around the release than usual.

NZD/USD levels

Technically, NZD/USD targets the 4hr 200 SMA at 0.6628 on the downside having been up to test the 0.6680 resistance through R3 at 0.6661. The next key level is 0.6780 resistance and the high for Nov ahead of the psychological 0.68 level.

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