NZD/USD fails to revert dominant bearish sentiment

FXStreet (Bali) - NZD/USD trades at 0.8560 having posted a new low for the week at 0.8553 following a break of 0.860 key support on Tuesday.

Sales in the AUD, coupled with a negative dairy auction, were a major drag for the Kiwi, with risk for a retest of 0.85/8520 increasing. Additionally, it is important to remember that most of the hiking campaign by the RBNZ appears to be now priced in by the market, hence limiting sustainable gains by the New Zealand Dollar, unless the RBNZ over-delivers on rate hikes, something difficult to imagine judging by Governor Wheeler's recent comments, linking future rate hikes to the NZD level, while threatening with potential intervention further down the road.

Technically, according to Jim Langands, Founder at FXCharts: "While the hourlies are recovering from having become oversold, the 4 hourlies and dailies hint at lower levels ahead and the next realistic support is not seen until the 23.6% Fibo (0.7718/0.8778)/minor rising trend line at 0.8525. A break of this would see it in further trouble, most likely heading towards the 100 DMA at 0.8425."