NZDUSD – New Zealand Dollar Faces Tough Task Ahead22 November, 2016 by Aayush Jindal in Fundamental Analysis, Market Analysis, NZDUSD, Technical Analysis
NZDUSD – New Zealand Dollar Faces Tough Task Ahead
- The New Zealand Dollar traded lower recently below 0.7100 against the US Dollar, and remained under a bearish pressure.
- There is a bearish trend line on the 4-hours chart of NZDUSD, which may act as a hurdle for the pair near 0.7060-80.
- There is also a strong resistance near the same levels, waiting to provide offers.
- Recently, the Chicago Fed National Activity Index (CFNAI), released by Federal Reserve Bank of Chicago posted a reading of -0.08 in Oct 2016.
NZDUSD Technical Analysis
The New Zealand dollar remained in a downtrend against the US dollar, and also broke the 0.7100 handle once. The NZDUSD pair is currently recovering, but may face sellers on the upside.
The pair recently traded above the 38.2% Fib retracement level of the last decline from the 0.7144 high to 0.6985 low. So, it may trade further higher, but there is a bearish trend line on the 4-hours chart, waiting to act as a resistance near 0.7060-80.
The stated levels also represent a strong pivot area, so it won’t be easy for the pair to beak it. Moreover, the 61.8% Fib retracement level of the last decline from the 0.7144 high to 0.6985 low is also just around the same levels. So, a move above the 0.7080 resistance won’t be easy.
Chicago Fed National Activity Index
Recently in the US, the Chicago Fed National Activity Index (CFNAI) was released by Federal Reserve Bank of Chicago. The market was expecting a minor increase in the monthly index designed to gauge overall economic activity.
The result was also positive, as there was a rise from the last revised reading of -0.23 to -0.08 in Oct 2016. The report added that “All four broad categories of indicators that make up the index increased from September, but all four categories again made non-positive contributions to the index in October”.
However, the US Dollar buyers were not impressed by the result, and the NZDUSD was seen trading marginally higher.
US Existing Home Sales
Today, the US Existing Home Sales is lined up by the National Association of Realtors. The forecast is slated for 5.42M in Oct 2016, compared with the previous month. A better than expected reading may lift the market sentiment for the US Dollar.