Technical Analysis

Kiwi gains ease a little in European morning trade

NZD/USD falls back below 0.7000

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The RBNZ produced a more hawkish tilt earlier in the day, signaling an end to QE and setting the platform to raising rates perhaps at next month’s policy meeting.

That sent the kiwi soaring with NZD/USD jumping to as high as 0.7030 in early trades coming into Europe but we are seeing a bit of a pullback to those gains now.

The pair is trading back under 0.7000 and also its 200-hour moving average (blue line) @ 0.6996, allowing for sellers to try and wrestle back some near-term control.

I would still argue that the kiwi remains bullish after the RBNZ tilt but against the dollar, it may be tough to manage gains outright considering Fed sentiment and the greenback’s resilience since June trading.

For NZD/USD, keep below 0.7000 and the 200-hour moving average and the near-term bias turns more neutral, though there is a steady support line seen closer to 0.6923 and that may offer dip buyers some incentive if price does retrace the earlier gains.

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