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Home ANALYSIS

NZDUSD back below 200 day MA. Bears/sellers making a further play to the downside today

A.R Chowdhury by A.R Chowdhury
April 7, 2022
Reading Time: 4 mins read
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NZDUSD

NZDUSD moves below and away from 200 day MA

The  NZDUSD 
NZD/USD

The NZD/USD is a commonly offered currency pair representing the New Zealand dollar or Kiwi and US dollar.  The pair is popular for exposure into a commodity currency, i.e. the NZD, which helps capture risk appetite for forex traders. Like its Antipodean counterpart, the Australian Dollar, the NZD/USD is seen as a carry trade, due in part to interest rate differentials which favor the NZD. The NZD is the world’s seventh most liquid pair at the time of writing with the USD being the world’s most traded currency and the NZD being the tenth. What Affects the NZD/USD? The NZD/USD is offered at virtually every retail forex brokerage and is a common pair for traders to have experience with.  The pair moves on investor sentiment and can be much more volatile than other pairs such as the EUR/USD, GBP/USD and others. Given New Zealand is the world’s largest exporter of milk powder, this metric is a key factor when driving the pair. Any sensitivity to milk powder exports is captured via the NZD/USD. Additionally, tourism is a key contributor to the New Zealand economy and as such help move the currency pair.  Other factors of note for the NZD/USD include export volumes to China as well as other important economic data releases from China.  Central banks also play a primary role in the direction of the currency pair with both the US Federal Reserve and the Reserve Bank of New Zealand being closely monitored by investors.  Monetary policy is more than capable of abruptly moving the NZD/USD, which can oscillate much more than other normal pairs.

The NZD/USD is a commonly offered currency pair representing the New Zealand dollar or Kiwi and US dollar.  The pair is popular for exposure into a commodity currency, i.e. the NZD, which helps capture risk appetite for forex traders. Like its Antipodean counterpart, the Australian Dollar, the NZD/USD is seen as a carry trade, due in part to interest rate differentials which favor the NZD. The NZD is the world’s seventh most liquid pair at the time of writing with the USD being the world’s most traded currency and the NZD being the tenth. What Affects the NZD/USD? The NZD/USD is offered at virtually every retail forex brokerage and is a common pair for traders to have experience with.  The pair moves on investor sentiment and can be much more volatile than other pairs such as the EUR/USD, GBP/USD and others. Given New Zealand is the world’s largest exporter of milk powder, this metric is a key factor when driving the pair. Any sensitivity to milk powder exports is captured via the NZD/USD. Additionally, tourism is a key contributor to the New Zealand economy and as such help move the currency pair.  Other factors of note for the NZD/USD include export volumes to China as well as other important economic data releases from China.  Central banks also play a primary role in the direction of the currency pair with both the US Federal Reserve and the Reserve Bank of New Zealand being closely monitored by investors.  Monetary policy is more than capable of abruptly moving the NZD/USD, which can oscillate much more than other normal pairs.
Read this Term
is trading below and away from it’s 200 day MA at 0.69041 (see green line in the chart above). The price is trading at 0.6885 currently. The price in the NZDUSD is also testing the broken 38.2% of the move down from the 2021 high at 0.6886. Moving and staying below that level would give sellers more confidence on the daily chart.

Close risk for sellers who are looking for more downside is now the broken 200 day MA. Stay below keeps the sellers happy and comfortable on the break. Move back above and that comfort starts to ebb.

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Drilling to the hourly chart below, there is additional support that is holding up the decline for the NZDUSD on the first test.

Looking at the hourly chart below, the price decline in the NZDUSD today, has also taken the NZDUSD to the 50% midpoint of the move up from the March 15 low. That level comes in at 0.68806. The low today just reached 0.6882 – just above that level.

The combination of the broken 38.2% retracement on the daily chart and the 50% midpoint on the hourly chart between 0.68806 and 0.6886 is giving traders cause for pause. There may be buyers against the level (profit taking?) but would expect stops on a break with momentum below the level.

Sellers who are looking for more, would still need to see the levels broken and remain broken.

NZDUSD

NZDUSD tests 50% and lower swing area
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A.R Chowdhury

A.R Chowdhury

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