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The New Zealand dollar dived during the Asian session, as the Reserve Bank of New Zealand Governor mentioned that the current levels in the New Zealand dollar are not acceptable. He also mentioned about the intervention. His comments did not go down well with the New Zealand dollar buyers, as the NZDUSD pair fell more than 100 pips within a couple of hours. More importantly, the pair broke a critical support area around the 0.8000 level to trade close to the 0.7950 level. It looks like the pair is going to continue trading lower in the coming sessions.
There were a couple of important trend lines, which were holding the downside in the NZDUSD pair, as can be seen in the chart attached. One can also notice how the trend has taken shape in the past couple of weeks. The pair is simply unstoppable, and recently broke the highlighted trend lines as well, which ignited more losses in the pair. There is a support around the 0.7920-00 area, but if the momentum is such, then it could be also breached easily. The trend is very negative and any rallies close to the broken trend lines might be seen as a selling opportunity. The 23.6% fib retracement level of the recent decline from the 0.8093 high to 0.7945 low is around the 0.7980 level, which could act as a resistance moving ahead.
There is even a chance that the pair might not retrace from the current levels. In that situation, the pair could test the 0.7900 handle in the near term.
Overall, selling rallies is a great option as long as the US dollar continues to trade higher.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
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