Kiwi Dollar Nears Channel Support Amidst Corrective Decline

Kiwi Dollar Nears Channel Support Amidst Corrective Decline

The New Zealand Dollar (NZD), colloquially known as the Kiwi, is currently pushing hard within a corrective channel. More importantly, it is approaching an important support line. Coming soon NZDUSD spend Report Analysts expect this pair to find its bottom fairly quickly. The bullish trend will be validated only when the currency pair trades above the corrective channel.

Kiwi displays a complex corrective downturn as its initial position. This decline serves as subwave “c” of Y, and it is the result of the highs hit in July. The drop increased after a steep fall in September. As shown in the chart below, the NZDUSD dropped sharply from near the 0.60 psychological support. The Federal Reserve finally made the right decision, cutting short term interest rates by 25 basis points on this downward trend. In their announcement, Fed Chair Jerome Powell made clear that this unexpected move was a direct response to growing fears about inflation and economic overheating.

Also, as an effect of these events in Asia (among other things), the US Dollar (USD) has received quite a boost, adding to the Kiwi’s downward pressure. In the meantime, NZDUSD is now trading close to the channel support, which is currently floating at the 0.5700 level. This support area is key near-term not just for the K, but for overall direction of the Kiwi going forward. If the price manages to stay above this level, a bullish trend may form. On the flip side, if it breaks the level of 0.5488, then the sentiment can turn towards more bearish movements.

Market analysts are watching these dynamics intently as they signal broader trends for currency trading and market conditions. Then, the corrective channel is extremely important to gauge the direction of NZDUSD. Traders and investors should be keeping a keen eye on its action at or near these important levels.

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