Given the recent slump from the 0.68 level, the NZDUSD pair has shown some resilience above the 0.65 level. Is the bearish trend over?
5 August, 2019 | Axiory – The New Zealand dollar, also known as the Kiwi, dropped like a stone over the last days and the NZDUSD pair is down nearly 300 pips from July’s highs, hovering slightly above the psychological 0.65 level.
However, the decline might not be over yet as the upcoming week is full of important major data for the NZD currency.
Firstly, Tuesday will bring the labor market data from the country for the second quarter and mixed results are expected. However, if the numbers aren’t really bad, the kiwi could rally somewhat afterward. Shortly later, the Reserve Bank of Australia is forecast to keep monetary policy unchanged and the main rate should remain at 1.0%.
Although this is a different country, the AUDUSD pair tends to influence the NZDUSD pair, as well as these Antipodean currencies, are usually tightly correlated.
Wednesday will bring the RBNZ monetary policy decision and market participants are expecting a rate cut after a very long time. This could be already priced in, considering the steep decline over the last days, but if the central bank sounds dovish (such as there is a need for more rate cuts), the kiwi might decline further.
The basic scenario for the next days could be – the NZDUSD pair corrects slightly to the upside and drops after the dovish RBNZ. Let’s see if it plays this way.
NZDUSD technical analysis
If we take a look at the chart, the major support seems to be in the 0.65 area, where previous lows are located. If bears push the price below this zone, large-stop losses will be hit and the next target should be at 0.6440, where last year’s lows are seen.
Alternatively, the resistance is seen near 0.6570 and as long as the pair is below this level, the short-term outlook seems bearish. Another resistance might be at 0.6640.
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