Sitting below resistance within a downtrend, NZDUSD is likely yo appeal to bearish swing traders. Now we just need the catalyst to push it our way.
Tomorrow morning New Zealand releases their quarterly employment data. Being quarterly, the data is very delayed so is likely to have a relatively muted impact on the Kiwi Dollar. That said we have become accustomed to falling employment and rising job creating so data which bucks this trend is likely to weigh down on the Kiwi. Additionally we have GDT prices which tend to have more of an impact on the Kiwi. I had begun to think it had reached a cycle low recently but last release fell short of expectations and scraped a 1% gain, so it hardy set the world alight. The highlight could indeed come from RBNZ Gov Wheeler speaking and he is likely to use the opportunity to jawbne the currency and reiterate that rates could either move up or down. This is a far cry from what the market expected only 1-2 months ago of at least one rate rise this year.
On a side note I cannot see a scenario in which RBNZ lower rates but Wheeler is likely to continue dangling this in front of the markets to keep the currency weak.
Technically we sit below 0.733 resistance and below the Jan '14 bearish trendline and 38.2% retracement. Whilst the bearish trendline is an added bonus, a bullish break of this trendline does not invalidate the trend until price breaks above 0.749 swing high.
We could, for example, retrace to 0.740 (61.8%0 or 0.745 (monthly Pivot) before forming a swing high and seeing the decline continue. Due to the bearish implications from tomorrow's NZD news line-up I doubt we'll see the deeper retracements and we do not have US data tonight.
Therefor the downside may be limited in Europe/NY session but NZ news tomorrow has greater chance of accelerating the trend towards 71c.
