NZD/USD: how much further is there to the downside?

Currently, NZD/USD is trading at 0.6947, down -0.04% on the day, having posted a daily high at 0.6955 and low at 0.6947.

NZD/USD has been chipping away at the mid point of the 0.69 handle but the dollar has been unable to gain traction across the board due to the euro rallying and slowing up the bear's momentum. Analysts at Westpac noted that NZD/USD has been capped at 0.7055 and probably heading towards 0.6900 multi-day, the US’ trade protection policies. dominating elevated global risk sentiment.

• Market wrap: dollar down on European currency advances - Westpac

NZD/USD 1-3 month:  

The same analysts explained the NZD/USD has the potential for higher to the 0.7100-0.7200 area during the month ahead, as USD longs are pared. "Further out, the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down towards 0.6900. The RBNZ’s persistent reminders it is on hold for a long time should also weigh."

NZD/USD levels

The 20th April rally to 0.7050 was broken yesterday along with the 200 ema on the hourly sticks and the 0.7000 psychological level. NZD/USD has moved towards the next critical level at 0.6933/50. A break of the 0.69 handle opens up the 0.6885 mark as being the recent lows guarding 0.6675 as the 29th May 2016 high on a break of the 0.67 handle. On the flip side, a run back to the previous aforementioned consolidation area, bulls have the 17th April highs of 0.7035 is sight protecting 0.7060/70 and recent high today around the 200-d ema (0.7067). There is a double bottom at 0.7130 as the mid-Feb lows.