- NZD/USD fails to hold break above 5-DMA, extends downside for a 2nd straight session.
- The pair is trading 0.41% lower on the day a 0.6867 at the time of writing.
- Bulls have failed to extend momentum higher, the pair is testing major trendline support at 0.6865.
- Break below will see further weakness. Scope then for test of 0.6780 levels.
- We expect some weakness ahead of the Reserve Bank of New Zealand's (RBNZ) next policy meet (due Wed).
- The RBNZ is expected to keep cash rate steady at 1.75% with little change in the policy statements.
- Majority of economists polled by Reuters also expect the central bank to remain unchanged on rates well into Q4 2019.
- On the flipside, 21-EMA at 0.6942 is major resistance. Breakout above could see bearish invalidation.
Support levels - 0.6860 (major trendline support), 0.6851 (May 16 low), 0.6780 (Nov 17 2017 low)
Resistance levels - 0.6880 (5-DMA), 0.69, 0.6942 (21-EMA), 0.70
Call update: Our previous call (https://www.econotimes.com/FxWirePro-NZD-USD-Trade-Idea-1375873) has hit all targets.
Recommendation: Good to go short on break below 0.6860, SL: 0.69, TP: 0.68/ 0.6780
