Oct. 24 (Bloomberg) -- New Zealand’s dollar may fall to the weakest in almost six weeks versus the greenback after the currency failed to strengthen past this year’s high set in April, according to JPMorgan Chase & Co., citing technical indicators.
The South-Pacific currency may drop to as low as 81.40 U.S. cents, the least since Sept. 16, Niall O’Connor, a New York-based technical analyst at JPMorgan, wrote in a research note today. That level is around the 38.2 percent retracement of the currency’s 2013 decline, and its 200-day moving average. A close below 85.01 tomorrow, which was almost the closing level on Oct. 18, would confirm a weekly bearish reversal pattern, O’Connor said.
”This week’s decline, after failing below the April highs, suggests some additional short-term consolidation is likely,” O’Connor said. “Support at the recent 83.50 breakout zone takes on added importance.”
The kiwi depreciated 0.8 percent, following a 1.4 percent slump yesterday, to 83.30 U.S. cents in New York. It touched 83.28, the lowest since Oct. 14.
The currency declined 3.6 percent during the past six months, the worst performance after Australia’s dollar, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-country currencies.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, currency or index. Resistance refers to an area on a chart where sell orders may be gathered. Support is an area where there may be buy orders.
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