NZDUSD – Watching for a secondary low
The New Zealand dollar extended its loss for 4 consecutive days as global dairy prices dropped nearly 8%, in which prices of whole milk powders plunged by 11%. The continuous drops in dairy prices left NZDUSD vulnerable to further declines in face of a possible Fed rate hike in December. Attention today will turn to FOMC meeting minutes with little domestic data on hand to drive direction.
NZD recovered quickly after touching a low of 0.6452. The current price action suggests that this pair is trying to form a short-term base for recovery.
- Monitoring the Kiwi for the potential secondary low in a broader corrective pattern. Price currently retesting the initial base while this area supports price has the potential to develop the next leg of upside correction. Catalyst for this move will likely be FOMC minutes disappointment for the hawks.
- Will venture long back through .6550 leaning against yesterdays low targeting and equality objective of .70/.71 as highlighted in the chart below.
- NOTE I will not enter this position in advance of the FOMC release