Kiwi May Drop 2% on Bearish Outside Day: Technical Analysis
New Zealand’s dollar may drop to a one-month low after posting a “bearish outside day” yesterday, Citigroup Inc. said citing technical patterns.
The so-called kiwi yesterday rose as high as 84.47 U.S. cents before declining to as low as 83.75, breaching both the high and low points of the previous day.
New Zealand’s currency may target so-called support at 83.34, a two-week low reached on Jan. 21, before falling to 81.56, Daniel Tobon, a New York-based analyst at Citigroup, wrote in a note to clients today. The kiwi last reached 81.56 on Dec. 26. Support is where buy orders may be clustered.
The New Zealand dollar “posted a bearish outside day on Thursday, suggesting the currency pair should continue to move lower,” Tobon wrote.
New Zealand’s currency fell 0.2 percent to 83.59 cents at 5:49 p.m. in Wellington, set for a 0.1 percent weekly drop.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
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