NZD/USD continues to test the 0.7050 level during Asian hours on Tuesday. The kiwi is trading up 0.09% at 0.7041 with a high of 0.7052 and a low of 0.7034 at press time.

The kiwi is trading in the green territory on the back of upbeat Chinese Retail Sales and Industrial Output data. On Monday, Chinese economic data showed that Retail Sales and Industrial Output jumped 4.9% and 3.5% YoY in October. So far, the pair has been dominated by concerns over the Chinese economic slowdown led by the debt crisis in the property sector.

Furthermore, expectations of yet another rate hike for November by the Reserve Bank of New Zealand keeps investors' expectations high. Reports suggest that New Zealand's central bank is widely expected to hike rates by at least 0.25%. In October, the central bank had raised interest rates by 0.5%, aimed to curb the rising inflation.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

In the daily chart, the NZD/USD retreated from 0.7080s towards Friday’s high around 0.7048, within the 50 and 100-day moving averages (DMA’s). The daily moving averages (DMA’s) remain directionless but provide support/resistance levels in the pair. However, as the 200-DMA remains above the spot price, the pair is tilted to the downside, but it remains almost horizontally, at risk of being broken.

A break above the 200-DMA, which sits around 0.7100, could open the door for further gains. The first resistance would be 0.7200. A breach of the latter would expose crucial supply zones, like the May 26 high at 0.7317, followed by the year-to-date high at 0.7465.

Bears In Control on Kiwi

Nov 16 2021