- US-China trade tensions continue to weigh on perceived riskier currencies.
- A modest USD rebound adds to the selling bias for the fourth straight day.
- The latest disappointment from the US data does little to lend any support.
The NZD/USD pair held on the defensive through the early North-American session and dropped to near two-week lows, around the 0.6560 region in the last hour.
The pair failed to capitalize on its early uptick to an intraday high level of 0.6588 and turned lower for the fourth consecutive session, extending the recent pullback from over one-month tops touched in reaction to last Friday’s weaker US monthly jobs report.
Persistent worries over a further escalation in trade tensions between the world’s two largest economies continued weighing on investors’ sentiment and turned out to be one of the key factors denting demand for perceived riskier currencies – like the Kiwi.
Adding to this, the US Dollar has managed to recover from near two-month lows set in the previous session, despite firming market expectations that the Fed will ease monetary policy in the coming months, and further collaborated to the pair’s offered tone.
Meanwhile, the latest US economic data – initial weekly jobless claims and import price index, added to the recent slew of disappointing macro data, albeit did little to provide any meaningful impetus or lend any support to the major amid the prevalent cautions mood.
From a technical perspective, a follow-through weakness below the 0.6550 immediate horizontal support might trigger some fresh technical selling and turn the pair vulnerable to head back towards challenging the key 0.6500 psychological mark.
Technical levels to watch
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