NZD/USD: The deeper correction is not over yet - Credit Suisse

FXStreet notes that NZD/USD weakness managed to extend further as the kiwi broke below the early August low and uptrend form March at 0.6597/75, keeping the prospect of a deeper setback alive. Support is seen at the 55-day average at 0.6523, then more importantly at 0.6503, which ideally holds, per Credit Suisse.

“NZD/USD weakness extended overnight, breaking below the early August low and uptrend form March, currently at 0.6597/75, thus completing a small top and finally managing to follow through on the recent bearish “outside day” and the bear “wedge” that is still in place. The market subsequently came to a temporary pause just shy of the 55-day average at 0.6523, ahead of the back of the broken 2014 downtrend at 0.6503. Although further downside is likely in the short term, we ideally look for this area to hold and shift into a lengthier consolidation phase.

“Resistance is then initially seen at 0.6575, above which would ease the recent downside pressure for a move back to 0.6596/97 – the back of the broken March uptrend. Above here though would see a shift back higher within in the range.” 

“Beneath 0.6503 could see weakness extend even further with next support seen at 0.6466, ahead of 0.6450/41. It’s worth highlighting the ‘wedge measured objective’ is at 0.6400.”