FxWirePro: NZD/USD retains bearish bias, upbeat New Zealand trade surplus data fails to impress Kiwi bulls
FxWirePro: NZD/USD eyes cloud support, kiwi drops across the board on RBNZ's outright dovish stance
NZD/USD chart - Trading View
NZD/USD breaks trendline support at 0.6575 and was hovering around 50-DMA support in early Asian trade.
The Reserve Bank of New Zealand kept the official interest rate unchanged at 0.25% and left the doors open for a potential cut to negative territory in the future.
Kiwi dropped across the board after the Reserve Bank of New Zealand boosts the asset purchase program at its policy meeting.
The RBNZ boosted the large scale asset purchase program (LSAP) by NZD 100 billion, while the markets were expecting a boost to NZD 75 to 90 billion.
Kiwi fell in a knee jerk reaction, dragging the NZD/USD pair lower to hit 4-week lows at 0.6524.
The pair has since pared some losses and was trading 0.43% lower at 0.6548 at around 02:30 GMT.
Technical indicators have turned bearish. Bearish divergence adds to the downside bias. Bears eye cloud support at 0.6453. Breach at cloud will see dip till 200-DMA.
Major Support Levels:
S1: 0.6453 (Cloud top)
S2: 0.64 (Psychological mark)
S3: 0.6362 (200-DMA)
Major Resistance Levels:
R1: 0.66 (converged 21-EMA and 5-DMA)
R2: 0.6622 (20-DMA),
R3: 0.6690 (Monthly high)
Summary: RBNZ's outright dovish stance to keep downside pressure on the kiwi. Weakness likely to extend across kiwi pairs. NZD/USD could see test of 200-DMA. Break below 200-DMA will open downside.