NZD/USD bears in control on rising DXY and higher VIX

Risk has played heavy on the bird with the VIX reaching above 18 overnight and NZD/USD is way off the 0.7320 level from yesterday's business making a low of 0.7234 so far.

US dollar index rises to 1-week high

NZD/USD has been extending the downside from just below the 0.75 handle at the top of August's rally and is embarking on key technical support at the 0.72 handle as time goes by. Markets are volatile with a big rise in the VIX and overnight play was in the bears court, with Wall Street taking a hit and losing the start of the week's gains on concerns over Central Banks losing sight and control as they start to run out of ammunition while on the other side of the coin,  the Fed could be in a position to hike rates this year as the outsider, leading to tighter money conditions elsewhere. 

Analysts at Westpac offered the NZD/USD in 1-3 month view, saying, "During the month ahead another probe above 0.75 is possible, driven by good NZ economic news, a still-vulnerable US dollar, and yield-chasing inflows. By year end, there's a case for a correction towards 0.70 if the Fed tightens in December as we expect. (13 Sep)."

NZD/USD levels

With spot trading at 0.7298, we can see next resistance ahead at 0.7302 (Daily Classic R3), 0.7306 (Yesterday's High), 0.7307 (Annual High), 0.7307 (YTD High) and 0.7324 (Daily High). Support below can be found at 0.7281 (Monthly High), 0.7281 (Weekly High), 0.7281 (Daily Open), 0.7276 (Daily Low) and 0.7265 (Daily Classic R2).

The big bluff in the era of Central Bank monetary socialism