The New Zealand Dollar (NZD) fell broadely against the US Dollar (USD) after the release of trade balance report, dragging the NZDUSD to less than even 0.6170, the lowest level since 2009 before retracing most of the losses on Wednesday during Asian session. The technical bias remains extremely bearish due to a Lower Low and Lower High in the recent downside wave.
As of this writing, the pair is being traded around 0.6488. A huge support may be noted around 0.6389, the 61.8% fib level of the last major move on the monthly chart ahead of 0.6167, the swing low of yesterday and then 0.6100, the psychological number.
On the upside, the pair is expected to face a hurdle near 0.6628, the intraday high of Tuesday ahead of 0.6707, the swing high of the last major upside rally and then 0.6855, the 50% fib level of the last major move on monthly chart. The technical bias will remain bullish as long as the 0.6707 resistance area is intact.
NZ Trade Balance Report
New Zealand posted a merchandise trade deficit of NZ$649 million in July, Statistics New Zealand said on Wednesday – representing 15 percent of exports. The headline figure missed expectations for a shortfall of NZ$600 million following the NZ$60 million deficit in June. Exports climbed 14.0 percent on year to NZ$4.20 billion – well above forecasts for NZ$3.83 billion although down slightly from NZ$4.23 billion in the previous month.
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy if we get a bullish pin bar or bullish engulfing candle near the current levels.
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