NZD/USD Eyeing 200-DMA to Extend Support
Bears further tightened their grip on the NZD/USD
pair as the pair continues to spiral down below the mid-point of
0.6800-0.6700 handle to currently trade 10-pips away from a fresh
two-month low of 0.6733 touched earlier.
With a lighter economic calendar on Tuesday, featuring only the release of US JOLTS jobs openings later during the NA session, the RBNZ's semi-annual Financial Stability Report will take the center stage. The release will be followed by Governor Graeme Wheeler's press conference and his testimony about the report before a parliamentary committee. Market participants will be looking for clues of an imminent interest rate cut at RBNZ's next policy meeting in June in order to raise inflation and curb the recent strength in it domestic currency, which has been hurting country's export sector of late.
From technical perspective, the pair has confirmed a bearish double-top reversal chart pattern and has also subsequently broken through a well-established short-term ascending trend-channel. Hence, in the near-term the pair remains vulnerable to further downside.
Technical levels to watch
From current levels, the very important 200-day SMA region, currently near 0.6725-22 area, seems to protect immediate downside. This is closely followed by support near 0.6700 level marking 50% Fibonacci retracement level o 0.6347-0.7054 up-swing. A decisive break through 0.6700 handle would now open room for extension of the pair's ongoing depreciating move in the near-term.
Meanwhile on the upside, 0.6760 level closely followed by day's peak near 0.6780 level (nearing 38.2% Fibonacci retracement level break-point) might now be looked for to provide immediate resistance. Even if the pair manages to clear these immediate hurdles, any further up-move might now be restricted at the ascending trend-channel support break-point, now turned resistance near 0.6815-20 area.