- Royal Bank of Canada (based on Bloomberg)
Trouble in the New Zealand's dairy sector triggered a 75-pip decline in the NZD/USD currency pair yesterday. From a technical point of view, the Kiwi should experience another sell-off today, with the ultimate target being the bullish tend-line at 0.6464. The closest support, however, rests around 0.6535, represented by the weekly S2 and the Bollinger band. On the other hand, US fundamentals might disappoint dramatically, which will cause the NZ Dollar to post significant gains and possibly negate yesterday's losses. Technical indicators are unable to confirm either scenario, as they retain mixed signals today.
Although not as strong as yesterday, but market sentiment remains bullish at 52% (previously 54%). Meanwhile, pending orders in the 100-pip range from the spot are equally divided between buy and sell ones.