New Zealand Dollar Outlook: AUD/NZD, GBP/NZD, NZD/CHF
New Zealand Dollar, British Pound, Swiss Franc, Australian Dollar – TALKING POINTS
- AUD/NZD may decline aggressively after pair was rejected at five-year resistance for a fourth time
- GBP/NZD selloff may deepen as pair tests key support but eager buyers could stave off the descent
- NZD/CHF ascent could be extended if pair breaks key resistance, highlights underlying bullish bias
While initially AUD/NZD appeared to be showing signs of confidence in finally being able to clear a five-year slope of depreciation, recent price action suggests the pair may capitulate for a fourth time. While past performance is not indicative of future results, the pair has on average fallen around 6.43 percent after being rejected at descending resistance. How far could a possible decline deviate from the average?
AUD/NZD – Weekly Chart
AUD/NZD chart created using TradingView
GBP/NZD’s aggressive selloff has seen the pair shatter an almost one-year uptrend and four levels of support. Its shy break below 1.9407 exposes the floor at 1.9203 which if punctured could aggravate selling pressure. However, RSI is showing GBP/NZD is in so-called “oversold” territory – i.e. below the 30 mark. An influx of buyers could overwhelm exhausted sellers and consequently could lead to a modest recovery.
GBP/NZD – Daily Chart
GBP/NZD chart created using TradingView
After briefly stalling between 0.6165 and 0.6223, NZD/CHF blasted through it and is now just below resistance at 0.6326. If bold price action becomes more timid, the pair may wilt and retreat to the March uptrend. Conversely, breaking higher would open the door to retesting a key inflection range between 0.6370 and 0.6408 which could inspire additional buyers to enter the market if it highlights an underlying bullish bias.
NZD/CHF – Daily Chart
NZD/CHF chart created using TradingView
--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitriTwitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.