23 Oct 2013
NZD/USD tumbles on China woes; kiwi falls apart across the board
FXstreet.com (Athens) – The NZD/USD cross is heading immensely downwards since the kick off of the Wellington trading session, mostly due to the sparking fears regarding Chinese tightening as well as on the selloff of the kiwi in favor of the Aussie after the solid Australian CPI data.
The NZD/USD is under heavy pressure since the early start of the European trading session, as risk aversion carried over from Asian trade. The main reason for the risk-aversion seems to be - by far - the Chinese funding concerns, as the Chinese benchmark money market rate jumped to its highest level since 29 July. News wires mentioned that “Central Bank of China refrained from adding funds to the market pushing money market rates higher,” as well as “China’s biggest banks tripled the amount of bad loans written off in the first half, cleaning up their books ahead of what may be a fresh wave of defaults,” dragging down immensely the Asian bourses. The kiwi is one of the mostly wounded currencies across the board as risk off sentiment has hit again the ‘on’ button.
Technical Perspective of NZD/USD
At the time of writing the pair is trading at 0.8380, down 0.56%. The FXstreet.com Trend Index shows the pair to be slightly bullish in the 15-minutes timeframe chart. Daily pivot point support can be found at 0.8400, 0.8376, 0.8355, and resistance at 0.8560, 0.8582 and 0.8603, respectively. Traders should bear in mind that the cross broke the uptrend support line consisting of late August- October lows, but the crucial technical support as of 0.8350 is still intact.
The NZD/USD is under heavy pressure since the early start of the European trading session, as risk aversion carried over from Asian trade. The main reason for the risk-aversion seems to be - by far - the Chinese funding concerns, as the Chinese benchmark money market rate jumped to its highest level since 29 July. News wires mentioned that “Central Bank of China refrained from adding funds to the market pushing money market rates higher,” as well as “China’s biggest banks tripled the amount of bad loans written off in the first half, cleaning up their books ahead of what may be a fresh wave of defaults,” dragging down immensely the Asian bourses. The kiwi is one of the mostly wounded currencies across the board as risk off sentiment has hit again the ‘on’ button.
Technical Perspective of NZD/USD
At the time of writing the pair is trading at 0.8380, down 0.56%. The FXstreet.com Trend Index shows the pair to be slightly bullish in the 15-minutes timeframe chart. Daily pivot point support can be found at 0.8400, 0.8376, 0.8355, and resistance at 0.8560, 0.8582 and 0.8603, respectively. Traders should bear in mind that the cross broke the uptrend support line consisting of late August- October lows, but the crucial technical support as of 0.8350 is still intact.