NZD/USD resting up at 0.6740 after good two-way business
|- NZD/USD has rebounded off the descending trend line support on the back of the teaser interview clip released by CNBC.
- Support is located at 0.6720 and resistance remains located at 0.6860 on the wide.
NZD/USD has rebounded off the descending trend line support on the back of the teaser interview clip released by CNBC where Trump revealed he is not thrilled with higher interest rates. The market dumped the dollar and the commodity sector benefitted, as did the antipodeans. NZD/USD is currently trading at 0.6743, a tad lower than the 0.6761 highs.
- US Pres. Trump worries that higher rates would 'nullify' work his administration has done - CNBC
NZD/USD was starting to consolidate around 0.6715 and a touch off from the descending trend support established back on the 16th July's business before the headlines. The news came as a reason to take profit after the magnitude of the sell-off from yesterday's revaluation in the Yuan where the PBoC, for the first time since the 9th August 2017, set the pair beyond 6.70 - (The CNY has lost around 8% since its late March peak and 5.5% since mid-June and is now back to the levels seen one year ago). NZD/USD was subsequently sliding from the 0.68 handle to 0.6780 that gave way to further supply throughout Asian and European markets to the 0.6713 NY lows.
- White House press secretary: Trump respects independence of Fed
Analysts at ANZ offer their point of view
"Commodity currencies were under pressure overnight, and the NZD was no exception. While the USD was toing and froing on Fed comments by President Trump, the general vibe around trade tensions and global growth appear to be weighing on the kiwi. We suspect positioning is going to limit the near-term downside, but price action leaves us cautious," - analysts at ANZ Bank New Zealand Limited explained.
NZD/USD levels
Support is located at 0.6720 and resistance remains located at 0.6860 on the wide. Nearer term, the price has been unable to overcome 0.6760, resisted by the 21-hr SMA. From a fundamental perspective, there is a case for further supply into the bearish channel below 0.6720. 0.6920, however, would put the bulls back in control and bulls can target the June highs. The 200-month moving average resistance at 0.7007 is next key level.
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