NZD/USD has dropped significantly to below the 0.66 handle. The low so far has been 0.6576. The catalyst was the ANZ February business confidence: 7.1 vs prior 23.0.
The decline might be blamed on the instability in financial markets while at the same time, inflation expectations came in at 1.39% vs prior 1.64% making for the lowest on record and exposes the downside in the bird as markets start to price in an interest rate cut from the RBNZ. This move is an extension of the US closing shift’s downside when the greenback rallied across the board on the GDPQ4 upside surprises.
Technically, the bird is on the way to the 4hr 200 sma at 0.6569 off the highs of 0.6775 and has fallen back below the 200 dma at 0.6651 having broken the 50 dma at 0.6620. the ultimate objective for the bears in the short term comes as the Feb lows of 0.6461 while on the flip side, the 28th Dec 2015 highs are 0.6883 with the pivot at 0.6676, R1 at 0.6705, R2 0.6722 and 0.6739.
(Market News Provided by FXstreet)