NZD/USD Technical Analysis: Kiwi Drops Most in 7 Months
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- NZD/USD Technical Strategy: Short at 0.7394
- Kiwi Dollar sinks after trend line break, drops to lowest in a month
- RBNZ intervention threat triggers largest one-day drop since January
The New Zealand Dollar accelerated lower against its US counterpart as expected, suffering the largest drop since January and hitting the lowest level in a month. The currency slumped after RBNZ policymakers threatened to intervene in FX markets to weaken it.
Prices are testing support in the 0.7259-76 area (chart inflection point, 38.2% Fibonacci retracement), with a break below that confirmed on a daily closing basis opening the door for a test of the 50% level at 0.7188. The first big upside hurdle is in the 0.7384-0.7411 zone (23.6% Fib, trend line support-turned-resistance).
The objective on the NZD/USD short trade from 0.7394 has been met and profit has been booked on half of open exposure. The rest of the position will be left in play to capture any follow-on weakness. The stop-loss has been trailed to the breakeven level.
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