- Existing home sales in the U.S. fall sharply in December.
- Greenback loses strength in the NA session.
- Risk-aversion limit’s NZD’s recovery.
The NZD/USD pair dropped to its lowest level in two weeks at 0.6707 earlier today, but took advantage of the modest selling pressure surrounding the greenback and turned flat on the day near 0.6730.
The risk-off mood on Tuesday weighed on the risk-sensitive currencies such as the NZD. Disappointing macroeconomic data from China and the euro area revived concerns over a global economic slowdown and the IMF lowered its global growth forecast for 2019 by recognizing the worrying signs.
Meanwhile, the greenback is having a difficult time extending its rally on Tuesday to help the pair limit its losses. Today’s data from the U.S. showed that existing home sales declined by 6.4% in December. In addition to the disappointing data, a more-than-1% drop in the 10-year T-bond yield puts more weight on the greenback’s shoulders. The US Dollar Index, which climbed toward the 96.50 area today, was last seen in the negative territory at 96.30.
In the early trading hours of the Asian session, Consumer Price Index figures from New Zealand will be looked upon for fresh impetus. Markets estimate the CPI to stay unchanged on a quarterly basis in Q4 and a lower than expected reading could weigh on the kiwi and vice versa.
Technical levels to consider
The initial support for the pair aligns at 0.6710 (daily low) ahead of 0.6670 (Jan. 4 low) and 0.6610 (Jan. 3 low). On the upside, resistances could be seen at 0.6740 (Jan. 21 high), 0.6790 (50-DMA) and 0.6850 (Jan. 15 high).
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