NZD/USD Slumps Below 0.5800 Amid Fed Hike Fears
NZD/USD slumped below 0.5800 after failing to break through a cluster of Simple Moving Averages, setting a near two-month low at 0.5797. The pair was down 0.65% and markets were watching whether it could hold the 0.5800 area into the close.
The technical tone turned bearish after the pair moved below the 100-day, 50-day, and 200-day SMAs at 0.5854, 0.5850, and 0.5842 respectively. Broader US Dollar strength has been underpinned by money-market pricing for a Federal Reserve rate hike.
Derivative traders are advised to position for further downside in the NZD/USD pair over the coming weeks as it breaks below the critical 0.5800 support. Purchasing short-term put options with a strike price of 0.5750 offers a highly effective risk-reward setup, allowing traders to profit from a move toward the next major support level at 0.5761.