NZD/USD looks poised to retest the November 2017 low

NZD/USD looks poised to retest the November 2017 low

The pair touched a low of 0.6812 earlier, the lowest point so far this year

The kiwi remains under heavy pressure on the day as poor data along with a breach of key technical levels continue to pin it down.
Business confidence fell to a seven-months low and with the market still focused on the trade rhetoric, it’s not making for a pretty sight in the kiwi against the dollar.

China’s continuous devaluing of the yuan and jitters surrounding the stock market there surely isn’t helping to ease nerves when it comes to both the kiwi and the aussie either, with China being both countries’ biggest trade partner.

But for the move in NZD/USD, I’m leaning more towards at a technical break more than anything. The pair previously held off declines in last week’s trading and yesterday from the 14 November low @ 0.6845 as daily closes fail to hold below said level.

Today though, it seems that sellers have found enough of an impetus to push the pair beyond that and now support around the 0.6800-10 handle looks to be the next level targeted. Given the follow through selling that we’re seeing and with the market still in a sombre mood, a test of the November low @ 0.6781 looks very much on the cards at this point.

That will be a key level to watch as the pair traded twice near the 0.6800 handle last year (in May and November) and found a bounce back towards the highs just above 0.7400 after the second lows was posted. Will it be the same this time around?

If the level does indeed give way though, it’ll be the lowest the NZD/USD has traded since June 2016. And that will open up a whole new set of technical levels to look at for the pair.

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