NZD/USD nears support
Last week’s bounce in the New Zealand dollar is confirmed to be the dead-cat variety. I wrote about this pair last Friday and noted taht it looked like a standard technical bounce.
Was it ever. The pair fell every day this week and is now threatening to take out the May low of 0.6482. The low so far today (just hit) is 0.6489.
The kiwi dumped today on soft housing and manufacturing data. Another cut from the RBNZ probably isn’t coming this month but August is starting to look highly likely.
So what’s the downside if we see a break? I think testing the October low of 0.6425 is the obvious answer. I think it’s a certainty that breaks if US-China talks go badly at the G20 and then it’s onto the 2015 low of 0.6209.