We anticipated a bearish move from Kiwi in our analysis published on 16th Sept, the expectations were based on the pairs failure to break above 61.8% fibo retracement level at 0.7200 and took a bearish reversal instead which forced NZDUSD to provide a closing below the 50% fibo level. Our upper trend line at 0.7120 acted as a strong resistance while driving the pair below 38.2% fibb level and 0.7050 price action. Currently NZDUSD managed to retreive back to the exponential moving averages 50 and 200 in the daily time frame after a touch down at 0.6990. The fact that the New Zealand economy went into lockdown last month on a very strong footing combined with its rapid recovery from the 2020 restrictions will likely boost policy makers confidence about the economic prospects for 2022. That said the restrictions will clearly have a detrimental impact on growth in the current quarter, while the Delta variant means there is still a lot of uncertainty about the future.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

As expected, the People's Bank of China (PBoC) announced on Wednesday that it left the 1-year and 5-year LPRs unchanged at 3.85% and 4.65%, respectively. However, the bank injected around 110 billion Chinese yuan of short-term cash and eased fears over the Evergrande financial crisis turning into a global turmoil. In turn, China-proxy NZD managed to gather strength against its American counterpart. Coming back to the technicals, we are looking forward to 0.6950 price action and weekly support zone, which if broken to the downside would lead the market towards 0.68000 because 0.6907 has our 61.8% fibo level on the weekly chart showing strong liquidity in that area. In case a bullish impulsive fractal is found above 0.69-0.7050, this would indicate that the pair has continued its bullish rally. For now 0.7000 and 0.7125 are our sight of focus incase of breakouts and further projections over Kiwi. 

NZDUSD

Sep 22 2021