NZDUSD, Daily
The Reserve Bank of New Zealand (RBNZ) news overnight – it has left its cash rate unchanged at the record low of 1.75%, which had been widely anticipated, while Governor Wheeler stressed that “a decline in the exchange rate is needed” and that “monetary policy will remain accommodative for a considerable period” as he noted “numerous uncertainties” on the global front. This was clearly negative for the NZD. NZDUSD lost nearly 1% in making a 16-day low at 0.7191, since recouping to the low 0.72s. A short position was taken this morning following the decisive break of the 20 day moving average, at 0.7215. This 20-day moving average and 23.6 Fibonacci zone around 0.7250 now reverts as short term resistance, while the 200-day moving average and the 50-day average below here, and provide the first downside target 1 at 0.7210. This also coincides with the 50.0 Fibonacci level. Should this strong support area be breached then target 2 would be beyond the 61.8 Fibonacci level at 0.7020. The RSI and MACD are turning negative, whilst the parabolic SAR turned negative yesterday.
The pivot high on Tuesday (February 7th) is the upside resistance zone at 0.7375 -0.7400. The Kiwi still ranks as the second strongest of the currencies we track on the year-to-date, with a net gain of 3.1% against the USD. The Aussie is the strongest, with a 3.6% advance.
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Stuart Cowell
Senior Market Analyst
HotForex
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