NZD/USD risks bear flag breakdown on trade war fears, NIEZR forecasts

• NZD/USD slips on trade war fears, downward revision of NZ growth forecasts.
• A daily close below 0.6924 would confirm a bear flag breakdown.

The NZD/USD pair is on the defensive, courtesy of US-China trade war fears and slightly softer New Zealand growth outlook for the next few years.

As of writing, the NZD/USD is down 0.36 percent and risks falling below 0.6924 (bear flag support) in a convincing manner on signs of risk aversion in financial markets. At press time, the S&P 500 futures are flashing red - down 0.41 percent.

US-China tit-for-tariffs have brought world's two biggest economies closer to a full-fledged trade war.

The NZD, being a risk currency, is likely being offered on trade war fears. Also, a slight downward revision to the growth outlook by the New Zealand Institute of Economic Research (NZIER) is seemingly adding to the bearish pressure around Kiwi.

NZD/USD Technical Levels

A daily close below 0.6924 would confirm a bear flag breakdown and signal a resumption of the sell-off from the April 13 high of 0.7395.

Key support: 0.6882 (May 30 low), 0.6851 (May 16 low).

Key resistance: 0.6975 (5-day moving average), 0.7004 (10-day moving average).