The NZDUSD moved sharply lower overnight as the Trade Balance came out surprisingly weak.  The Trade Balance showed an unexpected deficit of 50 million (a 395 million surplus was expected).  Both Imports and exports declined.  The New Zealand economy is dependent on exports.   Overseas shipments make up 30% of the NZ economy.   The farm industry is particular under pressure as the drought has imposed a huge burden.  The nations farmers not only have falling production but the countries dairy farmers have been forced to to stop milking cows (cows stop milk production when under stress) and instead have started to send them to slaughter. 

The 100 day moving average broke through the downside on Friday and tested the level yesterday and early today at the 0.7866 level. When it held and the Trade Balance figures came out so negative, the NZDUSD moved away from the key intermediate level lower. 

The pairs next hurdle is the 200 day moving average which comes in at 0.7666.  The market dipped below the 200 day moving average for one day on January 21, 2008.   

A break below this level would attract more longer term sellers.  If the longer term technicals turn negative (100 day and 200 day MA turn negative) and the fundamental news supports the price move, it is often a combination which is hard to ignore.