NZD/USD: Lost the Top Spot, Targets 20 DMA at 0.6868
NZD/USD has found some stability below the 0.70 handle after intraday downside play from 0.7053 highs scored yesterday.
NZD/USD was oscillating at 0.6980 ahead of Tokyo while the day ahead is absent of data for New Zealand. Instead, despite the risk-on sentiment, the Kiwi has been left on the sidelines for the tie being and instead the Aussie has picked up the pace led by AUD/JPY overnight with a strong bid in USD/JPY towards 110.00 before metals lifted the Aussie even further.
Oil was the main risk-on catalyst driving commodities higher, while US 10yrs rose significantly overnight from 1.76% to 1.85% further weighing on NZD/USD. However, the bird has had its own domestic positives of late, including the dairy prices improving in NZ's market's favour this week.
Meanwhile, we look ahead to Centra Banks next week, including the RBNZ who recently surprised markets with a rate cut to all time record lows of 2.25% and who's governor, Wheeler, has left the door wide open for further cuts in a very weak inflationary environment for the nation.
Failures on the 0.70 handle and heading below 0.6980 have opened a case for a break down to the 20 dma at 0.6868 as a key support level within this recent rally in April. First, yesterday's daily stick lows are a cent higher 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)