NZD/USD threatens bigger drop on break of recent consolidation

<p>Besides outright weakness in Chinese yuan, I'm not seeing all too much other reason for the drop in the antipodean currencies today. The aussie and kiwi are among the laggards alongside the Japanese yen, with the kiwi being the weakest of the bunch. NZD/USD is down 0.6% to near 0.6200 as it looks like sellers are making a play after the recent consolidation:</p><p>It is still early in the week but the drop also threatens a fall below its 100-week moving average of 0.6213 currently. That has arguably been a key technical level preventing a further drop so far to start the new year. So, just keep that in your back pocket for the remainder of the week.</p><p>In any case, the fall now looks to potentially move away from the 23.6 Fib retracement level at 0.6228 and could angle towards the 38.2 Fib retracement level at 0.6141 as the next technical test.</p><p>In the bigger picture, dollar sentiment will remain a key factor with the bond market still a major focus point for traders. For today, there won't be much on that front to really offer much assistance with US markets closed.</p>

This article was written by Justin Low at www.forexlive.com.