NZD/USD: are Bulls Dropping their Commitments?
NZD/USD has been lacking in vigour, in comparison to recent performances through the 0.70 handle.
However, that was a short-lived conquest and failures to maintain the top spot and close above 0.7000 have opened-up a chain of supply from 0.7056 intra-day highs down to current lows of 0.6976 scored in London. A turn in sentiment was found again when a strong case for the upside came in an even more convincing rally in US oil that has skyrocketed from $42.98 to $43.92 highs so far. NZD/USD traded back to the 0.70 handle, but has since met supply again and we stay with the bearish trajectory testing 0.6980 support.
The catalyst came in the EIA data, with EIA weekly oil inventories that showed less of a build at +2080k vs 3000k expected and +6634k prior and then markets getting ahead of themselves in respect of timings for a potential revival of an output freeze discussion between OPEC and non-OPEC nations.
However, the deputy oil minister of Iraq announced that OPEC and other oil producers will meet in May while Russia have said there is no agreement to meet in May. Russian energy Minister, Novak, said that he doubts there be any production freeze deals in the foreseeable future.
NZD/USD failures on the 0.70 handle have opened a case for a break of 0.6980 support with a target set at 20 dma at 0.6855 as a key support level within this recent rally in April. First, yesterdays daily stick lows are a cent high at 0.6947 and just below S3 at 0.6962. Classic S2 is located at 0.6909.
On the upside, recent highs need to break and a target of R1 at 0.7104 (9th June lows) ahead of R2 at 0.7121 and R3 is located at 0.7139. 0.7191 in 9th June closing price before the bearish gap on 10th June.
(Market News Provided by FXstreet)