Kiwi's knocked down

The dynamics of the pair NZD/USD yesterday was correctly interpreted as preparation for a serious fall. Even in periods of retreat of the US dollar, the pair stayed in range, but comments from RBNZ that the currency is still overvalued, called major selling of the kiwi. As a result, there was a drop of more than a figure to the region of 0.72. It is very likely that this is not the ultimate goal of the bears, and they will decide a new attack as soon as the market is slightly offset short-term oversale.

Unexpected growth of kiwi after interest rates cut

This week, the New Zealand dollar rose to its highest level in the past year against the decision of the Central Bank of New Zealand to cut rates by 25 bp to 2%.
On Friday there was a speech of the Reserve Bank of New Zealand Graeme Wheeler. On the meeting were reported some results of the measures and some forecastsfor GDP growth and inflation. It has been said, that a further reduction in the main refinancing rate in the area of ​​25-50 basis points is unlikely and will not achieve the desired effect, as the dynamics of economic growth is consistent with the forecasts. Regarding the inflation rate some anxiety remains, but with future reduction of the exchange rate, the inflation will reach the level of 2% in medium term. This statement has been welcomed by major market participants and led to purchases of NZD. It is possible, that the pair will continue to grow up to 0.7343, and in case of a break, to go to the level of 0.7400.

The dollar fell after weak economic data from the US

The dollar fell on Friday after US data unexpectedly indicated that retail sales in the US have not changed in July, while the producer prices fell, triggering fears about economic growth in the third quarter.
Economists forecasts for retail sales were for growth by 0.4 percent. The decline in producer prices was the first since March and the strongest since September 2015.
"Retail sales data in the US is particularly strong pushing down the dollar", - said Nick Bennenbrek from Wells Fargo Securities in New York.
Dollar slowed down by 0.46 percent on Friday night to a basket of major currencies, falling to 95.254, at least one week. The dollar also lost 0.9 percent against the yen to 101.00 and 0.6 percent against the euro, to $ 1.1201.
A week ago, the US currency has demonstrated rally after data, which pointed stronger job growth in July than forecasts, reinforcing expectations, that the Fed will raise rates this year.
However, this week, the dollar lost its advantage, as investors hardly expect a rate hike in September, and the December's meeting of the regulator is still far.
The Australian dollar rose by 0.3 percent to $ 0.7714 after falling to $ 0.7671. The New Zealand dollar gained 0,5 percent to $ 0.7249, before falling to $ 0.7186.

"Kiwi" is trying to fly!

It lives in New Zealand, such flightless kiwi bird. In honor of it on the trader slang called national currency: "kiwi» = NZD. While the majority of the commodity currencies are experiencing some pressure due to a general strengthening of the US dollar and a slight rebound of oil prices from peaks, our kiwi bird tries to fly.
Since Tuesday NZD/USD pair is trading at the support of the moving averages of 20 and 50 periods and tests the resistance around 0.6805. Index Stochastic Oscillator is in the overbought zone (above 65), but shows no signs of reversal.
While the support at 0.6735 is not broken, the pair opened up to the way towards 0.6845 and further to 0.6890-04 resistance zone. Indicators in H4 at the moment give buy signals. Recommendations for today: buy at the current quote [0.6802/06], but, preferably, not higher than 0.6810 (very aggressive) with the aim of 0.6835 near and more distant in the area of ​​0.6890.