NZDUSD has a volatile day, but could be topping on Fitch downgrade
Fitch downgraded the outlook for New Zealand’s AA+ sovereign credit rating to negative from stable and in the process warned that severe economic imbalances mean the government should dramatically tighten its purse strings.
The surprise move led to a sharp fall in the value of the NZDUSD. However, just when you think it is safe to go outside (or short NZDUSD) the pair retraced off the 38.2% support level and rebounded back higher.
However, the pair was not able to extend to new highs (or above yesterdays closing levels) and the price has started to move lower again – albeit at a slower pace. The 0.6388 level will be eyed on the downside. A break should lead to lower levels, while a bounce off the support puts the memory of the downgrade a distant memory as the market focuses on other fundamentals.
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