The Technical Outlook for the Kiwi isn’t Looking Pretty

Posted Thursday, April 26, 2018 by
Rowan Crosby • 1 min read

For the last seven trading sessions, the NZD/USD has been red. In that time we have had a few days where the USD hasn’t been green, but overall the outperformance to the downside must be a little concerning for the NZD bulls.

It’s fair to say that many of the majors have been struggling against the USD. We’ve seen treasury yields creeping higher to more than 3.00% and that is making the USD a lot more appealing that it has been in many years. The trend is also to the upside, after a long period of moving lower. Really since the GFC.

Even though commodities have been relatively strong, of which the NZD would theoretically benefit, price is continuing to fall.

The Technical Picture

We’ve already cracked through the 200 SMA which is as a general rule determines the longer-term trend. The short-term moving averages are clearly also bearish.

We are now facing a few key levels below. And the concerning thing is that there is a fair bit of room to move. The first key level is the psychological 0.7000. That is my first area of interest.

Beyond that, I think we will more than likely test, 0.6960 which is a key resistance level. Either way, there is plenty of downside room.

However, that also makes for a good trading opportunity. If we risk off say 0.7150 that would give us 1:1, although I think we could make that a fair bit tighter. Either way, I think we are trending strong and I’m more than happy to ride this one going forward.

NZD/USD
NZD/USD – 240 min Chart.

 

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About the author

Rowan Crosby is our Asia-Pacific Analyst
Rowan Crosby is a professional futures trader from Sydney, Australia. Rowan has extensive experience trading commodities, bonds and equity futures in the Asian, European and US markets. Rowan holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.
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