The NZD/USD has remained on the back foot into month and quarter-end, as the USD finds favour, and markets shy away from the Kiwi good news story. Economists at ANZ Bank expect the pair to edge lower as money managers could adjust their portfolios. downward momentum is strong and NZD is likely to weaken further even though the major support at 0.6910 could be just out of reach’. Our view for a weaker NZD was correct but the subsequent weakness exceeded our expectations as NZD cracked 0.6910 and plunged to 0.6861. While the sharp and rapid drop is deeply oversold, there is room for a test of 0.6840 first before stabilization can be expected. On the upside, a break of 0.6915 would indicate that the current weakness has stabilized (minor resistance is at 0.6900)

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

We noted yesterday (29 Sep, spot at 0.6950) that ‘rapid increase in downward momentum suggests further NZD weakness is likely’. We added, ‘the next support is at 0.6910 followed by 0.6880’. That said, we did not expect NZD to break both levels so quickly (overnight low of 0.6861). Downward momentum is strong but it remains to be seen if the weakness in NZD could reach the August’s low at 0.6807. The NZD weakness is intact as long as it does not break 0.6980 (‘strong resistance’ level was at 0.7025 yesterday). After breaking below 23.6% fibo level 0.6960, our major support zone, Kiwi has entered the dovish trend again with its first targeted destination at 0.680 which was our lowest low in the daily time frame. 

NZDUSD

Sep 30 2021