NZD/USD Price Analysis: Plummets to over one-week low, bears seize control below 200 EMA NZDUSD RBNZ Inflation Technical Analysis Currencies
NZD/USD adds to the previous day’s heavy losses and drifts lower for the second straight day.An oversold RSI on the hourly chart warrants caution before positioning for further losses.remains under intense selling pressure for the second successive day on Friday and retreats further from a nearly three-month top, around the 0.6380 region touched the previous day. Spot prices continue losing ground through the mid-European session and dive to over a one-week low, around the 0.
The New Zealand Dollar is weighed down heavily by the Reserve Bank of New Zealand's survey, which showed that inflation expectations for the first quarter eased to 2.79% from 3.30% in the previous quarter. This, in turn, lessens the need for further rate hikes by the RBNZ and prompts aggressive selling around the NZD/USD pair.
From a technical perspective, a convincing break through the very important 200-day Exponential Moving Average , which coincides with the 50% Fibonacci retracement level of the April-May rally, could be seen as a fresh trigger for bearish traders. Adding to this, oscillators on the daily chart have just started drifting into negative territory and support prospects for a further depreciating move.
Hence, it will be prudent to wait for some intraday consolidation or a modest rebound before traders start positioning for any further depreciating move. Nevertheless, the aforementioned setup suggests that the path of least resistance for the NZD/USD pair is to the downside and any attempted recovery back above the 50% Fibo. level, around mid-0.6200s, might still be seen as a selling opportunity.
On the flip side, any further downfall could find some support near the 61.8% Fibo. level, around the 0.6215 region. This is closely followed by the 0.6200 mark, below which the NZD/USD pair is likely to accelerate the fall towards the 0.6170-0.6165 intermediate support. Spot prices could drop further to the 0.6135 intermediate support before aiming to challenge the 0.6100 round figure or the April swing low.
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