NZD/USD drops sharply from monthly highs, 100-DMA eyed?

By FXStreet FXStreet (Mumbai) – Having failed near 0.6750 region on several occasions, the Kiwi came under heavy selling pressure and dropped sharply to fresh session lows below 0.67 handle.

NZD/USD recovery capped by daily pivot at 0.6704

Currently, the NZD/USD pair trades -0.47% lower at 0.6691, having posted fresh session lows at 0.6685 in last hours. The Kiwi remains heavily offered amid risk-averse market conditions and volatile oil prices, with markets giving up higher-yielding currencies such as the NZD, AUD, GBP etc., in a bid to protect their capital.

Adding to the negative sentiment surrounding NZD, ANZ bank downgraded 2015-16 Fonterra milk payout forecast to NZD 3.95/kg. While the drag in the Aussie on the back of retail sales miss also weighed on its OZ sister, the Kiwi.

Looking ahead, the main risk event for the pair remains the much awaited US non-farm payrolls data due later today, which is likely to trigger renewed USD sell-off and hence, may some respite to the NZD bulls.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6739/49 (daily high/ Feb 4 High), above which it could extend gains to 0.6763/69 (Jan 5 High/ daily R1) levels. To the downside immediate support might be …read more

Source:: FX Street