NZD/USD outlook: Kiwi Dollar down 1% on dovish RBNZ

Slobodan Drvenica Windsor Brokers

NZD/USD

NZDUSD was sharply lower during Wednesday morning (down almost 1% for the session) deflated by the Reserve Bank of New Zealand’s dovish stance.

The central bank left interest rates unchanged at 5.5%, as widely expected, but signaled that the door for possible rate cut remains open, should inflation continue to ease in line with expectations.

Fresh weakness broke through important technical supports at 0.6100 and 0.6089/80 (daily Tenkan-sen / daily Ichimoku cloud top /Fibo 38.2% of 0.5851/0.6221) and pressuring pivotal support at 0.6047 (July 2 higher low).

Daily close within a cloud to confirm bearish signal, with violation of 0.6047 trigger to complete a failure swing pattern on daily chart and open way for test of next targets at 0.6036/25 (50% retracement / daily cloud base), with break below thickening daily cloud to further weaken near-term structure.

Rising negative momentum on daily chart and daily Tenkan/Kijun-sen in bearish setup, add to negative near-term outlook.

Corrective upticks should be ideally capped by cloud top and not exceed daily Tenkan-sen, to keep bears intact and offer better selling opportunities.

Res: 0.6089; 0.6100; 0.6134; 0.6153.
Sup: 0.6047; 0.6036; 0.6025; 0.6000.

Interested in NZD/USD technicals? Check out the key levels

1. R3 0.6158
2. R2 0.6146
3. R1 0.6136
PP 0.6124
1. S1 0.6114
2. S2 0.6102
3. S3 0.6092

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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