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NZD/USD: Support Turned Resistance At 0.7100

Aayush Jindal

Aayush Jindal

Key Highlights

  • NZD/USD declined heavily below 0.7100 and 0.7000.
  • A crucial bearish trend line is forming with resistance near 0.7100 on the 4-hours chart.
  • EUR/USD and GBP/USD are likely to face resistance near 1.1950 and 1.4000 respectively.
  • The US Manufacturing PMI is likely to remain strong above 60 in June 2021 (Preliminary).

 

NZD/USD Technical Analysis

The New Zealand Dollar topped near the 0.7300 zone against the US Dollar. NZD/USD started a major decline and it even broke the key 0.7100 support zone.

Looking at the 4-hours chart, the pair gained bearish momentum below 0.7050. It even traded below the 0.7000 support level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair traded as low as 0.6922 and it is currently correcting losses. It already tested the 23.6% Fib retracement level of the recent decline from the 0.7212 swing high to 0.6922 low.

An immediate resistance on the upside is near the 0.7035 level. The first major resistance is near the 0.7065 level. It coincides with the 50% Fib retracement level of the recent decline from the 0.7212 swing high to 0.6922 low.

The main resistance is forming near 0.7100 (the last breakdown zone). There is also a crucial bearish trend line forming with resistance near 0.7100 on the same chart.

On the downside, the 0.6950 is a short-term support. Any more losses could open the doors for a drop towards the 0.6900 level in the near term.

Looking at EUR/USD, the pair could correct higher, but it could face hurdles near 1.1950 and 1.2000. Similarly, GBP/USD is likely to face a strong resistance near 1.4000.

Economic Releases

  • Germany’s Manufacturing PMI for June 2021 (Preliminary) - Forecast 63.0, versus 64.4 previous.
  • Germany’s Services PMI for June 2021 (Preliminary) - Forecast 55.5, versus 52.8 previous.
  • Euro Zone Manufacturing PMI June 2021 (Preliminary) – Forecast 62.1, versus 63.1 previous.
  • Euro Zone Services PMI for June 2021 (Preliminary) – Forecast 57.5, versus 55.2 previous.
  • UK Manufacturing PMI for June 2021 (Preliminary) – Forecast 64.0, versus 65.6 previous.
  • UK Services PMI for June 2021 (Preliminary) – Forecast 62.8, versus 62.9 previous.
  • US Manufacturing PMI for June 2021 (Preliminary) – Forecast 61.4, versus 62.1 previous.
  • US Services PMI for June 2021 (Preliminary) – Forecast 70.0, versus 70.4 previous.