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The price of the NZDUSD dropped significantly, but what caused the drop and what could happen next?

Watch the video to learn more…

 

Daily Price Action

NZDUSD daily timeframe

The price of the NZDUSD dropped as rumours of a halt to a rate hike was headlined after New Zealand entered into a nationwide lockdown. A spike in new Covid 19 cases forced the New Zealand Government into action and this has caused investors to think that a rate hike tomorrow is off the table. 

Price of the NZDUSD turned bearish from the open and continued to be bearish throughout the day reaching the previous range lows. 

In our previous week ahead analysis video we discussed the potential for a reversal and a move higher if the price could sustain above the major 0.7100 level. This outlook doesn’t look likely now.

Weekly Support

nzdusd weekly

The price is currently resting on major weekly support, if the price was to break the range and close below we could see a continuation of the bearish sentiment. 

The next weekly support zone is over 200 pips away offering some short opportunities in the near future. 

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