NZD/USD Heavy, Set to Test 50-DMA as Oil Deepens Losses

NZD/USD Heavy, Set to Test 50-DMA as Oil Deepens Losses

6 May 2016, 05:40
Roberto Jacobs
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NZD/USD Heavy, Set to Test 50-DMA as Oil Deepens Losses

NZD/USD’s recovery from NY lows faltered just shy of 0.69 handle, and the prices came under renewed selling pressure as Oil resumed decline and triggered fresh risk-aversion wave across the financial markets.

NZD/USD finally breaks to the downside

Currently, the NZD/USD pair trades -0.42% lower, in the vicinity of the fresh session lows struck at 0.6848 in the last hour. The Kiwi finally broke the overnight consolidation phase to the downside and now languishes near session lows as markets give up riskier/ higher yielding assets amid persisting risk-off profile, spurred by weaker oil prices as well as global equities.

Moreover, the NZD/USD pair receives a negative ‘rub-off’ effect from its antipodean partner after the Aussie plunged nearly 80-pips following the downward revisions to the inflation forecasts as reflected by the RBA SoMP. While calls for further RBA rate cuts also added to the bearish sentiment around the AUD.

Looking ahead, the broader market sentiment is likely to dominate the moves in the Kiwi ahead of the critical US payrolls release.

NZD/USD Levels to consider


To the upside, the next resistance is located at 0.6900/12 (daily high/ 5-DMA), above which it could extend gains to 0.6941/57 (Apr 22 high/ daily R3). To the downside immediate support might be located at 0.6832 (50-DMA) and from there to 0.6800 (round number).


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