NZD/USD: Deeper retracements into mid-2017 should affirm a solid base - Westpac

Tim Riddell, Research Analyst at Westpac, explains that although daily momentum of NZD/USD pair shows some potential for divergence (failing to affirm new lows in NZD) but technical continues to suggest deeper retracements and a swift regaining of levels above 0.6925 is needed to avoid the potential of deeper retracement flush-outs towards the 0.6715-30 area.

Key Quotes

“Weekly

• The lack of any sign of basing in declining weekly momentum suggests that NZD’s slide from January’s 0.7375 high has further to run
• After the break below 0.6890, deeper retracements towards 0.6700 seem likely before range support can be defined”

“Monthly

• Some indicators remain relatively neutral, but have turned lower on the confirmed break of channel support. This suggests deeper retracements into 2H’17
• However, longer term patterns still suggest that such retracements will define consolidation support within a broad 0.6500-0.7250 range”