The kiwi dollar dropped as much as 6.00% in 2019 to 0.6285 against USD, its lowest since August 2015. The price may fall towards 0.6230 suggested by its A-B-C weekly corrective structure. Since the RBNZ’s surprise, OCR cut in August the cross has been sloping in a descending channel. Technically, it manages to hold the parallel support level located at 0.6265 on Friday.
Ahead of next week’s RBNZ September meeting the cross still traded in a range of 0.6265-0.6450 levels. If broke below support at 0.6265, Sep 2019 low, suggesting a move towards 0.6170 its 161.8fe (below chart) and 0.6100 August 2015 low and 0.5930 level identified as the and June 2006 and May 2005 low.
Going into the RBNZ meeting on Sep 25, the September low of 0.6265 can now provide some support to the cross. However, it is likely to break eventually on the ongoing dollar strength and RBNZ’s dovish bias. The short-term target on the downside is at 0.6230 that is the C points of its -A-B-C corrective structure (Weekly). Traders remain focused on the 19-year TL (below chart).
The RSI (Relative strength index) indicators are at 31, implying that the cross is relatively oversold, whereas the oscillator is remaining bearish turnaround.
Either at 0.6230 or at 0.6170 the cross could find its foot in near-term.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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