It’s definitely not a good week for the kiwi. Not only has the RBNZ’s dovish tilt weighed on the currency, but the more risk-negative mood in the markets has also compounded the declines of recent sessions. Add a stronger dollar to the equation, and NZD/USD sellers are indeed looking for a downside break after a few months of consolidation:
The pair was hovering somewhat between 0.6100 and 0.6300, mostly with some attempts in early April and mid-May to continue a move towards 0.6400. These eventually faltered and now, with a break below 0.6100 – the lowest levels since November last year, we could see the bearish momentum picking up.
The next key objective will be the 50.0 Fib retracement level around 0.6025 with the 0.6000 mark also in focus for the bears.
A lot will depend on today’s and tomorrow’s daily and weekly closes respectively, so keep an eye on that and how it will play into the pair’s technical picture.
But with the dollar continuing to remain more balanced across the board and risk sentiment still looking jittery outside of tech stocks, this doesn’t bode well for the kiwi as we look to the latter stages of the week.