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NZDUSD Channel Resistance Holding (June 24, 2016)

Daily Forex Reports | by Kate Curtis | Friday, 24 June 2016 04:00 UTC

NZDUSD has been trending higher on its longer-term time frames but it appears to have hit a major road bump at the top of its ascending channel. The resistance around .7300 appears to have held and price is setting its sights back on the support at the .6800 major psychological level.
 

Stochastic is pointing down and looks ready to head south from the overbought region. RSI appears to be moving lower already, indicating that sellers are taking control of price action. On the other hand, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside and the nearby support levels at the mid-channel of interest or .7000 handle might hold. In addition, the 100 SMA is around the bottom of the channel, adding to its strength as a potential floor. 

The main event risk for this might be the official outcome of the EU referendum, as the results would have repercussions for the global economy and risk sentiment. A vote to leave the EU could mean losses for higher-yielding currencies like the Kiwi while a vote to stay could revive risk-taking and lead to gains for the Kiwi. 

Data from the US economy came in mostly stronger than expected yesterday, as both initial jobless claims and flash manufacturing PMI beat expectations. This should renew the dollar's strength as a safe-haven currency, leading to gains in times of risk aversion. 

Up ahead, durable goods orders data are up for release, with analysts expecting the headline figure to show a 0.5% decline and the core figure likely to show a 0.1% uptick. There are no reports due from New Zealand for the rest of the week, keeping sentiment mostly in play. 

By Kate Curtis from Trader's Way

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