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NZD/USD - Bearish pin bar seeks validation

  • Kiwi awaits bearish trend reversal confirmation.
  • The pair trades below 0.69 levels and 1-hour 100-MA.

Kiwi fell below 0.69 levels to hit a session low of 0.6886, although as per textbook rules, only a negative close today would validate yesterday's bearish pin bar candle and signal a near-term trend change.

As of writing, the spot is trading just below 0.69. The bullish tone ran out of steam yesterday at a high of 0.6945.

Reserve Bank Governor Grant Spencer, while speaking to a Parliamentary committee, said the odds of a housing market crash are low. The central bank also Reserve Bank announced a slight relaxation of the loan to value ratio (LVR) restrictions. However, the NZD pairs hardly reacted to these developments.

Looking ahead - The spot may continue to trade in the sideways manner around 0.69 levels, tracking the dull treasury yields. The pair may face renewed selling pressure if the US core PCE (Fed's preferred measure of inflation) beats estimates.

NZD/USD Technical Levels

A move above 0.6905 (Nov. 23 high) may revive the bullish tone just enough to send the spot higher to 0.6945 (yesterday's high). An end of the day close above the same would signal a continuation of the rally from the Nov. 17 low of 0.6780 and could yield 0.7006 (50-day MA).

On the downside, 10-day MA of 0.6865 could offer strong support. A close below the same would validate bearish pin bar candle and open doors for 0.6818 (Oct. 27 low) and 0.6780 (Nov. 17 low).

 

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