Forex: Kiwi finishes sharply lower ahead of NZD Jobs Data

FXstreet.com (Barcelona) - The Kiwi finished the day sharply lower, down 36 pips at 0.8406. However, the pair did trade as low as 0.8361 at one point, but was able to find support and edge higher later in the US Session. The catalyst for the initial decline was comments from RBNZ Governor Wheeler, who mentioned the RBNZ has recently intervened in the FX market to weaken the NZD. Market participants should be aware of the upcoming NZD jobs data, due out later in the session at 22:45GMT.

According to Mike Jones, Senior Currency Strategist at BNZ, “We suspect the “intervention” Governor Wheeler was talking about was the “passive” intervention the Bank restarted in November last year. We doubt the Bank has been involved in any bazooka-style “active” interventions – the conditions for such have not yet been met in our view. Passive intervention is generally done in smaller amounts and is not designed to influence the level of the currency ¬– something Wheeler reiterated yesterday.”

From a technical perspective, short term moving averages are now in bearish set up with price below both the 9 and 20dm’a. the RSI is in neutral set up between 40-60, but should be watched carefully should the 40 level be broken on a close. Initial support sits at 0.8361 (low of day), followed by 0.8320 (support on daily chart). Initial resistance sits at 0.8440 (previous support, now resistance on 1 hour chart), followed by 0.8498 (the 9dma)