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The New Zealand dollar continued to move lower against the US dollar, as the recently released inflation report missed the mark. There is a lot of bearish pressure increased on NZDUSD. To add on the pressure, the Bank of Canada reduced the interest rates, which dented the risk sentiment and pushed the New Zealand and the Aussie dollar lower in the near term. The NZDUSD traded below the 0.7600 support area and tested the 0.7520 level, which can be considered as a short-term barrier for sellers. The Business NZ PMI was released by the Business NZ earlier during the Asian session, which increased from the previous revised reading of 55.6 to 57.7.
There is a critical bearish trend line formed on the hourly chart of the NZDUSD pair, which stalled the upside on many occasions. The hourly RSI is around the extreme levels, which might cause a minor pullback in the near term. However, the Kiwi dollar buyers might struggle to take the pair higher. Initial resistance can be seen around the 38.2% fib retracement level of the last leg from the 0.7709 high to 0.7513 low in the short term. More gains might take the pair towards the 50% fib retracement level. The Kiwi dollar buyers could only gain control if they manage to pierce the highlighted trend line.
On the downside, the recent low of 0.7513 might act as a support. A break below the mentioned level could even take the pair below 0.7500.
Overall, one might consider selling rallies close to the 50% fib level as long as it is trading below the highlighted trend line.
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Posted By IKOFX Technical Team: Online Forex Broker
Website – http://ikofx.com
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