The New Zealand Dollar (NZD) plunged against the US Dollar (USD) on Wednesday, dragging the price of NZDUSD to less than 0.6920 following the release of trade balance report in early Asian session. The technical bias remains bearish because of a lower low and lower high in the ongoing downside move.

Technical Analysis

As of this writing, the pair is being traded around 0.6917. A support can be seen near 0.6900, the psychological number ahead of 0.6869, the intraday low of yesterday and then 0.6672, the swing low of the last major downside move as demonstrated in the given below daily chart.

On the upside, the pair is expected to face a hurdle near 0.7035, the horizontal resistance area ahead of 0.7238, the swing high of the last major upside rally and then 0.7403, the high of November 2016. The technical bias shall remain bearish as long as the 0.7238 resistance area is intact.

New Zealand Trade Balance

New Zealand had a merchandise trade balance of NZ$705 million in November, Statistics New Zealand said on Wednesday – representing 18 percent of exports. Exports to the EU fell NZ$116 million (32 percent), and to the USA by NZ$111 million (23 percent). Other top export destinations (China, Australia, and Japan) showed little change. Imports were at NZ$4.56 billion versus expectations for NZ$4.50 billion and down from NZ$4.72 billion a month earlier. On a yearly basis, capital goods led the fall in imports, down NZ$326 million (26 percent), while intermediate goods fell NZ$53 million (2.9 percent).

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair on rallies could be a good strategy in short to medium term.