NZDUSD The Bears Continue to Dominate
The NZDUSD has become my personal favorite currency pair to watch over the past couple of weeks and it continued to bring excitement last week.
Although the Reserve Bank of New Zealand (RBNZ) raised interest rates for the fourth consecutive month last Wednesday evening, Governor Wheeler used his post interest rate speech to encourage the NZDUSD to plummet by the most it had experienced in nearly six months. Wheeler signaled that after four successive interest rate hikes, there would now be a pause in monetary tightening. Additionally, Wheeler expressed that the current value of the New Zealand Dollar was both unjustifiable, and unsustainable. As a result, the NZDUSD declined by over 100 pips.
This week, there is a lack of New Zealand economic releases and after Governor Wheelers comments last week, the NZDUSD will likely continue to experience some bearish movement.
However, both the Stochastic Oscillator and RSI are now located around the oversold boundaries and looking at Thursday’s and Friday’s smaller sized candlesticks, it does appear that the heavy selling period could be coming to a conclusion. If the NZDUSD does continue to decline in valuation, support levels are located at 0.8522 and 0.8501.