NZD/USD drops to lows post NZ trade balance data, this is key supporting area

Currently, NZD/USD is trading at 0.7249, down -0.13% on the day, having posted a daily high at 0.7270 and low at 0.7246.

Forex today: "An act of war" spun markets around into risk-off late trade

NZD/USD was offered on the back of the trade balance data for August that arrived as -NZD1,235.0 mln; vs estimate of -NZD825.0 mln. The bird dropped from 0.7262 to 0.7246 post the release, extending the downside drift post the NZ elections and the recent "Act of war" N.Korean news that has weighed on higher beta currencies such as the bird. Analysts at Westpac suggest that NZD/USD will be capped by 0.7300 if the risk-averse mood persists.

New Zealand: Coalition time - ING

NZD/USD 1-3 month: 

"If the RBNZ remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then NZD/USD could fall as far as 0.70 by year-end. Pre-election jitters may also weigh on the NZD," added the analysts at Westpac. 

NZD/USD levels

To the downside, a break of the 23.6% Fib of the 0.7132/0.7344 rally with a subsequent break of  0.7220 would expose 0.7195 as a recent low. 0.7127 is the June 6th low and 0.7100 is a key psychological level. A break above 0.7300 opens 0.7370 (the 9th Aug high). Such momentum would solidify a bullish trend back towards 0.7522 and the YTD highs so long as there are closes on the 0.74 handle and beyond the post FOMC kneejerk highs of 0.7434.