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NZD/USD: awaiting next catlyst for continuation below 0.69 handle

  • NZD/USD closed NY having made a low below 0.69 handle.
  • NZD/USD eyes key economic data in day ahead.

NZD/USD has been in a decline from 0.6979 highs set last week and has continued lower at the start of this week in the dollar's resurgence with a break of the 200-hourly SMA at 0.6921 and subsequent slide below 0.69 the figure. Currently, NZD/USD is trading at 0.6903, down 0.00% in the early Asian session, having posted a low of 0.6896 in NY.

Forex today: cautious play, dollar steady at key support, carry soft on prospects of higher global rates

"The USD rose against all in the G10 overnight. Some risk concerns, commodity price jitters and positioning seem to explain the majority of the move, which pushed NZD/USD below 0.69," explained analysts at ANZ, adding, "Technically, dairy prices look biased to base in the short-term, and with other export prices holding in, this should provide some NZD support too."

For the day ahead, data comes from China and Australia. Australia: Oct NAB business survey is released and then Chinese Oct retail sales and industrial production follow.

What is the outlook for NZD/USD?

"NZD/USD 1 day: 

Lower to 0.6875 if US interest rates continue to rise relative to NZ interest rates.
NZD/USD 1-3 month:  

If the RBNZ remains firmly on hold, as we expect, and the US dollar rises on the delivery of a Fed interest rate rise in December, then NZD/USD should fall to 0.67 by year end," analysts at Westpac explained.

NZD/USD levels

NZD/USD broke the 0.69 handle and is consolidating basing the 4-hr 100 SMA at 0.6905 while the 10-SMA is crossing below the 50 SMA in the same time frame. A follow through, as expected according to the momentum indicator below its midline, exposes 0.6880 (the Oct 30 high). A break there opens 26th Oct low of 0.6818. To the upside, 0.6980 guards 0.7055, 9th Oct low.

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