Kiwi breaks down
The Kiwi has a close relationship to the Australian dollar, and concerns there have crossed the Tasman Sea as the New Zealand dollar (NZDUSD) followed the Australian dollar (AUDUSD) into negative territory. NZD broke through key support at 0.6775 today and out of the bullish triangle which has contained it throughout the whole of 2019. We’d expect this to now act as a ceiling and this is likely to be re-tested in the coming days. We don’t see any collapse here, and in fact rather than any downward move gathering momentum we’d expect it to slow down as value is sought on the dip. There should be plenty of bids around in the 0.6720-50 range and only a sustained breach below 0.6600 would give us cause to reassess our view.