Kiwi Nosedives Post Horrible CPI Figures

Key Highlights

• US dollar continues to rock the FX market as it climbed further against almost all other currencies, including the Euro and British pound.
• New Zealand consumer price index released by the Statistics New Zealand during the Asian session missed the mark, and registered an increase of 1.0% (YoY), compared to the forecast of 1.3%.
• New Zealand dollar dived post the CPI release and traded as low as 0.7830 against the US dollar.
• Aussie dollar struggling to hold the ground against the US dollar as economic data continue to weigh in the mind of buyers.
• Commodities such as GOLD and SILVER moved lower Intraday on the back of strength in the US dollar.

AUDUSD

The Australian dollar was mostly seen trading in a range against the US dollar, and it also formed a breakout pattern on the hourly chart. There was an awkward looking triangle formed, which acted as a support and resistance on a number of occasions. The most important point was that the mentioned triangle support was aligned with the 100 hourly moving average at 0.8777. The AUDUSD pair earlier during the early Asian session managed to move lower below the stated confluence support area to close below the 100 hourly moving average.

Intraday Support Level – 0.8720

Intraday Resistance Level – 0.8780

• Overall, as long as the pair stays below the 0.8780 level it can move towards 0.8700-20.
• 100 MA might act as a resistance for the pair in the short term.

There is no doubt that there are solid bearish signs emerging on the hourly chart. However, one concern is that there was no follow through after the break, which means the break can also be considered as a false break. If the pair managed to settle back above the 100 MA, then it might continue trading higher in the near term.

SILVER

SILVER also performed badly in the last couple of sessions, as the US dollar gained bids. There was an important bullish trend line on the hourly chart of SIVLER, which was breached recently. Similar to the AUDUSD case, SILVER too has the 100 moving average aligned with the mentioned trend line but there was a difference as the 200 hourly moving average was also around the same area. So, the recent break in SILVER can be very crucial, as it could ignite more losses in the short term. It is currently trading around the 76.4% fib retracement level of the last leg from the $16.99 low to $17.62 high. There is a chance that SILVER might correct a bit from the current levels, which can be seen as a selling opportunity.

Intraday Support Level – $17.00

Intraday Resistance Level – $17.30

• Selling rallies around the 100 MA is a good option.
• 200 MA is a pivot zone SILVER moving ahead.

There is also a possibility that SILVER might continue heading lower from the current levels and retest the last swing low of $16.99. Any further downside acceleration could take the prices towards the $16.60 level where buyers are likely to appear.

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