After the GLOBAL DAIRY TRADE in London yesterday, the price of standardized milk dropped by -1.4% and this caused a decline in NZD, which is directly dependent on the London’s result.
Additional pressure turns the overall decline in commodities-linked currencies. After the surprise from RBA, it becomes quite possible Reserve Bank of New Zealand to take active steps to support the manufacturing and export sector. With increasing expectations of intervention it is possible breakthrough below 0.6840 support for NZD/USD and than we can see a drop to the next psychological level around 0.6802 where is MA50 (D). In case of breaking this level, the decline will probably deepen to minimums of January 2016 and September 2015 under 0.6300.
Currently the pair consolidates around MA20 (D) and strong horizontal support, there is likely a short-terms upward movement within the channel until at least 0.7046.
G.Hristov - Head of Fundamental Analyzes
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