FxWirePro: Kiwi on the Back-Foot, NZD/USD Slips Below 0.78 Handle, Good to Sell Rallies
- NZD/USD had gained some traction overnight in the US session on the back of the GDT auction, but US dollar picked-up significant strength across the board on upbeat US CPI figures.
- Kiwi bulls brush aside NZ dairy prices which showed some gradual improvement with the GDT-TWI up 2.6% and whole milk powder (WMP) rising 3%.
- Poor NZ PPI datasets also weighed down on the Kiwi. NZ PPI fell 1.0% in Q1, against expected 0.3% rise. The Output PPI fell 0.2% in the same period, following a decline of 0.8% in the previous quarter.
- NZD/USD slips below 0.78 handle, is currently trading around 0.6793 levels.
- The pair finds strong support at 0.6760,breaks below will see test of 0.6707 (cloud base).
- The pair has broken minor trendline support at 0.6798 and technical indicators support downside.
- Resistance is located at 0.6800, above which it could extend gains to 0.6848 (double top May 5th and 12th).
- To the downside immediate support might be located at 0. 6760 (Trendline) and from there to at 0.6707 (cloud base).
- Markets now await the FOMC minutes due later today for further cues on the major. In the meantime, the major will continue to track the broader market sentiment.
Recommendation: Sell rallies around 0.68 levels, SL: 0.6850, TP: 0.6760/0.67