NZD/USD bears back in control, targeting the 23.6% Fibo
- NZD/USD currently trades at 0.6774, up from 0.6725 from 0.6969 overnight highs.
- The 23.6% fibo is now a target down at 0.6663.
The kiwi took a battering and remains on shaky grounds. NZD bounced off a two-month low of 0.6725 to 0.6780. AUD/NZD reversed some of yesterday’s gains (which followed disappointing NZ GDP data), seemingly weighed down by global sentiment, from 1.0555 to 1.0490.
Risk off sentiment continued as the FOMC decision and concern over the growth outlook weighed. Due to political strife in Washington and the prospects of Sino/USD relations breaking down, again due to with the US Justice Department allegations against two Chinese nationals coming out of nowhere, coupled with FOMC outcome, bearish for risk and high betas such as the kiwi.
Analysts at ANZ noted that The kiwi has had it tough due to the combination of soft GDP, FOMC and a change in the OCR call all sent it down through support levels. "We retain a medium-term bearish bias, although whether it can make further progress south in the near term will hinge on the USD and it is looking a little shaky here too."
- Support 0.6720
- Resistance 0.6980
NZD/USD dropped back below the 38.2% fibo and now eyes a test of S1 and confluence with the 50-D SMA down at 0.6735. The prospects for a flight towards the 61.8% Fibo at 0.7048 have flipped to the 23.6% fibo as a more likely scenario instead; Down at 0.6663. RSI and various indicators are leaning with a bearish bias, supporting the bearish outlook for forthcoming price action.