CitiFX: bearish on NZD/USD
Initial target for NZD/USD lies in the 0.8400/50 range. Further decline will be a bullish trend breakout and trigger a much deeper drop.
CitiFX analysts turned clearly bearish on the New Zealand dollar following the last night's RBNZ decision and dovish comments from the regulator. Analysts note that NZD/USD broke below the 55-day MA and the strong support at 0.8650 on the news.
According to strategists, if this bearish move proves sustained, we will see further depreciation on th Kiwi dollar. They remind that the last close below the 55-day MA in May was followed by a sharp 200 point drop.
Support to watch below 0.8400/50:
0.8347: 55-week MA;
0.8222: 200-week MA;
0.8042-0.8052: Rising trend line support and low of the Oct 2013-Feb 2014 correction;
0.7684: June 2013 corrective low;
0.7371: Major low from November 2011 which IF breached on a weekly close basis would confirm a major long term top and suggest a fall below 0.6000.
Chart. Daily NZD/USD