24 Jul 2013
NZD/USD hit by China-induced sell-off, will it hold 0.7950 key support?
FXstreet.com (Barcelona) - Following a strong trade surplus in New Zealand, which fueled the NZD/USD to tests highs of 0.8010, the China HSBC PMI has been a burden to heavy to bear by Kiwi bulls, resulting on a revisit of 0.7950 before a 20 pips bounce.
China rules price action in NZD/USD too
The reaction on the New Zealand Dollar comes in contrast with the muted activity in the currency seen after the Australian soft CPI release. Fears of a slowdown accelerating in China, after the 47.7 print (11-month low), continues to rule price action.
NZD/USD needs to hold 0.7950 support
From a technical standpoint, NZD/USD needs to hold above the 0.7950 support in order to stabilize prices and keep the developing 2-week upside momentum intact. On the contrary, as noted by Brent Hansen, Technical Analyst at IFR Markets, "0.7932 50-DMA will come as next support if 0.7950 succumbs, while 0.8000/05 upper bollinger band is now resistance."
China rules price action in NZD/USD too
The reaction on the New Zealand Dollar comes in contrast with the muted activity in the currency seen after the Australian soft CPI release. Fears of a slowdown accelerating in China, after the 47.7 print (11-month low), continues to rule price action.
NZD/USD needs to hold 0.7950 support
From a technical standpoint, NZD/USD needs to hold above the 0.7950 support in order to stabilize prices and keep the developing 2-week upside momentum intact. On the contrary, as noted by Brent Hansen, Technical Analyst at IFR Markets, "0.7932 50-DMA will come as next support if 0.7950 succumbs, while 0.8000/05 upper bollinger band is now resistance."