The New Zealand dollar slumped again this morning. The Reserve Bank of New Zealand （RBNZ）announced tighter lending restrictions across the nation from September 1, and will also reduce the limit of Loan to Value Ratios (LVR) from 80% to 60% for borrowers. The aim of the new measure is for mitigating risks to financial stability resulting from overheating in the housing market. The restriction measures increase the probability for RBNZ to further cut the interest rate on 11th August from the current record low of 2.25%.
NZDUSD has plunged from a high of 0.7324 on 12th July to 0.7008 this morning, a 4.32% drop, breaking out the downside uptrend channel support at 0.712 on the daily chart. 8 EMA is going to crossover 20 EMA, and ADX indicator +D1 just crossed over -D1, indicating the start of a downtrend. The current price section is between 20 EMA at 0.7139 and 50 EMA at 0.7042. The resistances at 0.712 followed by 0.7139. The downside support level at 0.7053 followed by 0.7042, if confirmed breakout could target further downside support at 100 EMA at 0.6937 followed by 200 EMA at 0.688.