NZD/USD perks up pots positive surprise trade balance, but remains broadly bearish
|Currently, NZD/USD is trading at 0.7231, up 0.12% on the day, having posted a daily high at 0.7237 and low at 0.7220.
NZD/USD is currently testing the upside of the narrow range of overnight between 0.7197 and 0.7237. The trade data was the catalyst for 10 pip spike due to there being a surplus of NZ 85m vs the expected deficit of 200m. The data came after yesterday's offer in the bird post the 'government reigning in funding news' ahead of the elections on the 23rd September this year. A key factor in the trade data was that there had been a recovery in dairy export prices that helped boost July 2017 exports.
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However, and as analysts at Westpac noted, NZD/USD has broken down technically, with 0.7200 vulnerable today.
NZD/USD 1-3 month:
The analysts at Westpac also explained that if the RBNZ remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then NZD/USD could fall as far as 0.70 by year end. "Pre-election jitters may also weigh on the NZD," noted the analysts.
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NZD/USD levels
To the upside, 0.7240 and then 0.7280/00 ahead of the aforementioned 0.7337 recent highs and 0.7370 (9th Aug high) are the immediate resistance areas. To the downside, 0.7220 0.7205, the 06 June 22/21 low and 0.7186, the June 15th low, along with the 50% of the move up from the 2017 low (May low) at 0.7187 are key areas of support ahead of 0.7150 June 5 high; 0.7127 June 6 low and 0.7100.
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