Summary:
- NZDUSD slides following RBNZ decision
- USDCHF bounces off the key support level
- USDCAD continues upward rally
In today's technical analysis we will take a look at three currency pairs tied to with the US dollar: NZDUSD, USDCHF, USDCAD.
The New Zealand dollar sinks after the RBNZ decision
NZD is one of the worst performing major currencies on Wednesday.. The downward move was triggered by a surprising decision of the RBNZ. The Reserve Bank of New Zealand decided to cut interest rates by 50 basis points, while the market was expecting a cut of only 25 bps. During the conference, the bank's Governor also said that further cuts may be coming in the following months and that he does not rule out the possibility of rates dropping below zero at some point in the future. The situation on the chart does not look good for NZD. The exchange rate broke below the support zone at 0.6800 with a strong momentum, and even smashed through the 2018 lows. This paved the way towards a bigger decline and as long as NZDUSD remains below the area marked with red colour on the chart below, this setup remains valid. . As RBNZ announced more rate cuts, the fundamental situation also supports further weakness of the New Zealand currency.
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Source: xStation5
USDCHF bounces off the key support at 0.9720
When it comes to USDCHF, the exchange rate bounced off the key support zone from D1 interval. As long as the price remains above 0.9720, the upward move is a base case scenario. Gains could accelerate once the price breaks above the 0.9800 handle, where a local resistance level can be found. In case of a break higher from there, the next support level to watch is localized at 0.9950 handle. On the other hand, bears could regain control over the market and make one more attempt to break below the 0.9720 handle.. Note that the longer the market tests the support, the weaker it becomes (until now the level was defended 3 times).
Source: xStation5
USDCAD extends the upward move further
Last but not least, let's take a look at USDCAD. The price trades within an upward channel and close to its upper limit. If the prices manage to recover above the 50% Fibo level of the latest drop, we could see a move towards the 61.8% Fibo retracement. On the other hand, a bigger drop could be triggered by a break below the channel range In case of the market turns lower, the nearest support to watch can be found at 1.3255.
Source: xStation5
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