has nzdusd topped out 2685472017

The NZD/USD failed to maintain its early gains and turned sharply lower on Thursday. The sell-off came despite news that inflation in New Zealand had risen by a bigger-than-expected 0.4% in the fourth quarter versus 0.3% expected. On top of this, the latest economic pointers from the US, including jobless claims and new home sales, disappointed expectations on Thursday. Though there are no further data scheduled from NZ tonight, there is an important piece of data to look forward to from the US tomorrow: GDP. The world’s largest economy is expected to have grown 2.1% in the fourth quarter on an annualised basis versus 3.5% in Q3. If the actual number turns out to be better, then this could spark further dollar buying interest, potentially resulting in sell-off for the NZD/USD.

When price fails to respond in the way you would reasonably expect it to is usually a sign that the trend may be about to change. For the kiwi, it was the lack of a positive response to the inflation data that has me thinking that it may be about to turn sharply lower again. Interestingly, the NZD/USD reached a technical resistance level at 0.7310 overnight before heading lower. As can be seen, this level converges with several factors, namely (1) the backside of the broken bullish trend line, (2) the underside of the bearish trend line and (3) previous support and resistance level. For the sellers to take full control of the kiwi again they will need to reclaim the broken resistance at 0.7225 now, ideally on a daily closing basis tough we may see a bounce from this level as traders take profit on their bearish positions today. In any case, a sustained break below 0.7225 support would potentially pave the way for a move back towards 0.7000 support, with the 50- and 200-day moving averages being additional bearish targets in the interim. Alternatively, if support at 0.7225 holds and the kiwi eventually breaks through resistance at 0.7310, then price may go on to test prior reference points at 0.7400 or 0.7485 before deciding on its next move.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.