NZDUSD bears eye the bearish channel after short squeeze reloaded shorts below double tops. What is next for the pair? Gain insight into this 17 July NZDUSD Technical Outlook.
17 July, GKFX – NZDUSD soared above 0.6800 in a short squeeze after the inflation data. However, the bid was short lived as well, a move that was less fundamental and more technical in a correction of the bearish excess offering an opportunity to short again below the recent double tops of the 0.6850s.
However, the fundamentals were back in play today with Powell’s testimony advocating for a continuation of rate hikes with markets banking on a further widening in the rate gap in favour of the greenback.
NZDUSD CPI was higher, indeed, but we are still some way below the RBNZ’s target and thus, with the Fed assuring further rate hikes in the US, the dollar is the higher yielding asset over the kiwi.
Highlights of Q&A from Fed Powell’s testimony
- Labor market has strengthened, workers better off
- Fed is just shy of achieving symmetrical inflation goal
- IN the near term US economy looks good
- Trump’s tax overhaul should support US growth over the next 2-3 years.
- Gradually raising rates is the way for us to extend the economic expansion.
- I wouldn’t declare victory on inflation yet.
Elsewhere, the Global Dairy Trade Price index fall -1.7% weighing on the bird with the average price coming in at $3222 – (the last 4 auctions have seen lower prices).
17 July NZDUSD Technical Outlook
Bears can target 0.6720 with RSI heading lower in the short and longer term, (weekly moving deeper towards oversold and hourly more to go below neutral levels). Resistance is located at 0.6840/60 (21-D SMA 0.6810).
Spot and current levels are around 0.6785 and where the 10-D SMA, (6790) is located and bears are looking for closes below here to confirm a continuation of the downside into the bearish channel. 0.6920, however, would put the bulls back in control and the June highs will be up for grabs.
However, bulls really need to get above the 200-month moving average resistance at 0.7007 to stave off bearish pressures.
This article 17 July NZDUSD Technical Outlook was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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