NZD/USD Plummets Amid Trade Balance News

The New Zealand Dollar (NZD) slid down against the US Dollar (USD) on Wednesday, dragging the price of NZDUSD to less than 0.6925 following the release of trade balance report in early Asian session. The technical bias remains bearish because of a lower low and lower high in the ongoing downside move.

Technical Analysis

As of this writing, the pair is being traded around 0.6910. A support can be seen near 0.6900, the psychological number ahead of 0.6869, the intraday low of yesterday and then 0.6672, the swing low of the last major downside move as demonstrated in the given below daily chart.

On the upside, the pair is expected to face a hurdle near 0.7035, the horizontal resistance area ahead of 0.7238, the swing high of the last major upside rally and then 0.7403, the high of November 2016. The technical bias shall remain bearish as long as the 0.7238 resistance area is intact.

New Zealand Trade Balance

New Zealand’s trade balance rose less-than-expected last month, data showed on Tuesday. In a report, Statistics New Zealand said that the trade balance rose to a seasonally adjusted -705M, from -815M in the preceding month whose figure was revised up from -846M. Analysts had expected the trade balance to rise to -500M last month.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair on rallies could be a good strategy in short to medium term.

 

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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