22 Jan 2015
NZD/USD accelerates losses below 0.7550
FXStreet (Bali) - NZD/USD is posting new session lows at 0.7538, breaking Wed's cheapest point at 0.7550, with further room to run to the downside, from a tech perspective, following the resolution below 0.76/7620.
The unexpected decision by the Bank of Canada to cut interest rate from 1% to 0.75% led the Australian Dollar to fall sharply through the US session on expectations that the RBA may be the next one to cut rates either in February or March. At the same time, a combination of NZD playing catch up with the AUD, coupled with low inflation in New Zealand - early Wednesday - strengthening the case for the RBNZ - meets January 29 - to drop its explicit tightening bias, led to the collapse in the NZD/USD as, with the breakout of 0.76 of important technical significance.
Jim Langlands, Founder at FXCharts, notes: "Technically, despite now being at a 2 ½ year low, the Kiwi is sitting above some important support, this being the 100 Month MA and also the descending trend support (daily chart, below). A break to the downside though will find little to hold it until 0.7435 (61.8% of 0.6560/0.8842), but with interim bids likely to be at 0.7500. The topside will see sellers at the 12 Dec low at 0.7608 and again at the 5 Jan low at 0.7618, above which would take us back into the previous 0.7620/0.7700 consolidation area."
The unexpected decision by the Bank of Canada to cut interest rate from 1% to 0.75% led the Australian Dollar to fall sharply through the US session on expectations that the RBA may be the next one to cut rates either in February or March. At the same time, a combination of NZD playing catch up with the AUD, coupled with low inflation in New Zealand - early Wednesday - strengthening the case for the RBNZ - meets January 29 - to drop its explicit tightening bias, led to the collapse in the NZD/USD as, with the breakout of 0.76 of important technical significance.
Jim Langlands, Founder at FXCharts, notes: "Technically, despite now being at a 2 ½ year low, the Kiwi is sitting above some important support, this being the 100 Month MA and also the descending trend support (daily chart, below). A break to the downside though will find little to hold it until 0.7435 (61.8% of 0.6560/0.8842), but with interim bids likely to be at 0.7500. The topside will see sellers at the 12 Dec low at 0.7608 and again at the 5 Jan low at 0.7618, above which would take us back into the previous 0.7620/0.7700 consolidation area."