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FxWirePro: NZD/USD extends break below 21-EMA, outlook bearish

NZD/USD chart - Trading View 

Spot Analysis:

NZD/USD was trading 0.18% lower on the day at 0.7019 at around 08:25 GMT.

Previous Week's High/ Low: 0.7150/ 0.7025

Previous Session's High/ Low: 0.7087/ 0.7025

Fundamental Overview:

Antipodeans depressed on China's retail giant Evergrande's default story which is gaining traction and dampening the investors' sentiment.

Further, investors remain wary ahead of U.S. Federal Reserve's monetary policy meeting due this Wednesday.

Uncertainty over the US covid stimulus also weighs on the market sentiment, dragging the pair lower.

Main focus for now is on the FOMC monetary policy decision for clues on the asset tapering and interest rate hike timelines.

The central bank is expected to open discussions on reducing its monthly bond purchases, while tying any actual change to U.S. job growth in September and beyond.

Technical Analysis:

- NZD/USD extending downside after rejection at channel top and 200-DMA

- Price action capped at weekly cloud top resistance, is extending grind lower

- GMMA indicator shows major and minor trend are strongly bearish on the intraday charts

- The pair has slipped below 21-EMA and momentum studies are biased lower

Major Support and Resistance Levels:

Support - 0.6972 (55-week EMA), Resistance - 0.7053 (21-EMA)

Summary: NZD/USD is poised for further weakness. The pair is on track to test 55-week EMA at 0.6972. Retrace above 21-EMA negates bearish bias. 

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