The kiwi currency is living up to its namesake
The flightless bird that is the New Zealand currency is taking a battering from all sides
The banks are queuing up to cut expectations for the currency. The RBNZ is under further pressure to cut rates, dairy prices continue to tumble while forecasts for payouts get cut, and not even good news from manufacturing last night could stem the drop in NZDUSD. The banks are lining up to announce when the next RBNZ rate cuts will be. Bank of New Zealand came out earlier to say the currency will fall to 62 cents in Q4 2015 vs 65c prior
A few hours ago we broke the May/Jun 2010 lows around 0.6560 and have grabbed a pip under 0.6500. On the tech front the 61.8 fib at 0.6397 (call it 0.6400 plus change) is the last chance for buyers to make a stand
NZDUSD weekly chart
So there's not much going for the kiwi right now on the NZ side and with the market still chewing over the whys and wherefores of US rates, all the ducks are lined up to add more pain
The 61.8 fib could be very important. As those ducks line up on the NZD side, so the market price will reflect that, meaning that if and when the RBNZ do pull the trigger, it's not going to be a surprise. That in itself might lessen any further falls. The tipping point is likely to come from the US side of the trade
Looking a bit closer we're already seeing resistance coming in ahead of the broken 0.6560 level with more at 0.6600/05. 0.6620 will be a stronger level to watch on a move up
NZDUSD 30m chart
If you're short, you're loving it but watch how that fib performs if we test it as it may be a point to take some profit off. If you're a buyer then it's a level to look for a long as long as you keep it tight
