The Kiwi continued its gradual but sure slump against the US Dollar and other currencies after the ANZ Business Confidence indicator experienced a sharp drop for the month of August. The figure came in at -52.3, which was a steep decline from the July figure of -44.3. It was also the lowest that this economic indicator has been in more than 11 years, with the last time such low figures were registered being April 2008.
As a result, the NZD/USD has fallen as much as 0.4% and is currently trading at 0.6301. This is the lowest that the NZDUSD has been in the last 4 years, while the pairing of the Kiwi with the Yen is presently at 7 year lows.
Technical Play
The NZDUSD has exhibited the typical price cycle that is displayed on the charts when the institutional players suck retail traders into the so-called “bull trap”. The bias for NZDUSD continues to remain bearish, especially as markets continue to price in further rate cuts by the RBNZ before 2019 is over.
The best bet would be to sell on rallies. A trace of the Fibonacci retracement tool from the July 2019 highs to the present lows indicate that a strong resistance will lie at the 38.2% Fibonacci retracement level (Lows of May and June 2019). However, the modified Stochastics oscillator set to a reading of 5,3,2 will determine if this is the area at which to sell on the rallies, if it forms an overbought signal. Patience is therefore the watchword for those who intend to sell the NZDUSD at this time.