New Zealand Dollar Outlook Bearish vs USD, CAD & CHF
New Zealand Dollar Analysis, NZD/USD, NZD/CAD, NZD/CHF – TALKING POINTS
- NZD/USD broke below a month-long uptrend: key levels to look for ahead
- NZD/CAD selling pressure may grow after rising support was invalidated
- NZD/CHF shattered slope of appreciation, rejected by descending ceiling
NZD/USD Technical Analysis
After bottoming out at a 9-year low, NZD/USD rose a little over 7.50 percent and was carried up by a modest uptrend – at least until now. Following the RBNZ rate decision, the New Zealand Dollar plunged against all of its major counterparts, causing NZD/USD to break below the uptrend. If the breach is met with follow-through, the pair may retest 0.5829 with an eye at the 9-year floor at 0.5670 if former support does not hold.
NZD/USD – Daily Chart
NZD/USD chart created using TradingView
NZD/CAD’s break relative to NZD/USD appears far more decisive, and therefore the selloff which may ensue could be more aggressive. Downside price action may encounter some friction at the range between 0.8321 and 0.8298. However, if that floor cracks under the weight of sellers, the next support layer to watch for will likely be 0.8170, which also marks the start of what would later become the recently-invalidated uptrend.
NZD/CAD – Daily Chart
NZD/CAD chart created using TradingView
Selling pressure in NZD/CHF may be particularly acute after the pair’s attempt and failure to puncture descending resistance dating back to December 2019. Combined with the unfavorable fundamental circumstances – like the RBNZ rate decision and coronavirus pandemic – the pair capitulated and broke below an uptrend that helped the pair nurse its losses after its double-digit decline.
NZD/CHF – Daily Chart
NZD/CHF chart created using TradingView
Looking ahead, the pair may retest familiar support at 0.5700 where NZD/CHF previously stalled at the tail end of March. If those technical floorboards are ripped up by sellers, the basement at 0.5542 may be at risk of being flooded with eager sellers looking to capitalize on the pair’s decline. Having said that, buyers looking to find a bottom may help alleviate selling pressure.
--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.