New Zealand dollar is under selling pressure as surging US bond yields/risk-off mood drag the NZDUSD pair below the 0.65 handle. What next should traders expect?
4 October, GKFX – Yesterday’s upbeat US economic data – ADP report and ISM non-manufacturing PMI, sparked a fresh wave of US Dollar buying interest and weighed heavily on the major.
Adding to this, hawkish comments by the Fed Chair Jerome Powell, saying that rates may well need to go beyond neutral, helped the US Treasury bond yields to break higher and remained supportive of the strong USD upsurge.
In fact, the benchmark 10-year yields have climbed above the 3.20% for the first time since 2011, which set off some nervous tones across global equity markets and further dented the already weaker sentiment around perceived riskier currencies – like the Kiwi.
New Zealand Dollar Under Selling Pressure
The pair kept losing ground on Thursday and dropped to an intraday low level of 0.6484, the lowest since early Feb. 2016. Meanwhile, the strong USD bullish momentum took a brief pause and was now seen as the only factor lending some support, at least for the time being.
In absence of any major market moving economic releases, the pair remains vulnerable to extend the downward trajectory amid prevalent strong bullish sentiment surrounding the buck and growing expectations for a stronger NFP report on Friday.
Technical levels to watch
A follow-through selling has the potential to continue dragging the pair further towards 0.6445 intermediate support en-route the 0.6410-0.6400 region. On the flip side, attempted recovery moves might now confront fresh supply near the 0.6520-25 region, above which a bout of short-covering could lift the pair back towards the 0.6600 handle.
This article was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.