- The New Zealand Dollar moved down this week and traded below 0.7300 against the US Dollar.
- There is a short-term descending channel pattern with resistance near 0.7278 forming on the hourly chart of NZD/USD.
- Today in New Zealand, the Business NZ PMI for July 2017 was released by the Business NZ.
- The result was on the lower side, as there was a decline from the last revised reading of 56.0 to 55.4.
NZD/USD Technical Analysis
The New Zealand Dollar started a major downtrend from the 0.7470 level against the US Dollar. The NZD/USD pair has moved down more than 150 pips and currently trading well below the 0.7300 handle.
The pair recently traded close to the 0.7250 support area where it found support and started consolidating in a range.
There is a short-term descending channel pattern with resistance near 0.7278 forming on the hourly chart of NZD/USD, which might act as a downside move catalyst in the near term.
NZD/USD Hourly Chart
The channel resistance is also close to the 23.6% Fib retracement level of the last decline from the 0.7366 high to 0.7251 low.
So, if the pair corrects higher, it may face sellers near 0.7280. Further on the upside, there is a connecting bearish trend line positioned at 0.7310-15 along with the 50% Fib retracement level of the last decline from the 0.7366 high to 0.7251 low.
Therefore, any major correction is most likely to face major hurdle near 0.7300-10 going forward.
Business NZ PMI
Today in New Zealand, the Business NZ PMI for July 2017 was released by the Business NZ. The market was looking for no major change in the PMI from the last reading of 56.2.
The actual result was on the lower side, as there was a decline in the PMI to 55.4. The last reading was also revised down from 56.2 to 56.0. However, the current reading was well above the expansion levels, and was similar to the Feb’s reading. This is also well above it long term average of 53.3.
Commenting on the same, the Business NZ’s executive director for manufacturing, Catherine Beard, stated:
Expansion across the five indices was very even for July, with the total difference between the lowest and highest results at only 1.2 points. Of particular note was the highest level of expansion for employment (56.4) since September 2014, along with finished stocks (also at 56.4).
Overall, the NZD/USD pair may correct a few pips higher, but upsides are most likely to remain capped by the 0.7300 handle.