NZD/USD has been defying  gravity, eyes on convergence back to S2 lows at 0.6570

• NZD/USD has been defying  gravity with a broad-based bid on the greenback and risk-off markets.
• Firstly, the Hang Seng closed down 2.4 pct and  European shares followed suit while the pressure built on the Italian banks. NZD/USD climbed from a low of 0.6575 to reach a high of 0.6613 and currently trades at 0.6606.  

NZD/USD detached from the moves in the Aussie whereby stops were tripped below 0.7200, (a key technical and confluence level now acting as resistance  at the time of writing) and the Aussie sank to as low as 0.7162. AUD/NZD fell all the way down to 1.0898 from 1.0953. USD/JPY dropped from 114.02 to a low of 113.52 in a risk-off market and with the dollar giving back some ground in the US session.

The major European indices in a sea of red:

• Spain’s Ibex  -1.1%
• Italy’s FTSE MIB -0.23%
• Portugal PSI20  -0.4%
• German Dax  -0.5%
• France’s Cac  -0.7%
• UK’s FTSE -0.2%

However, US stocks have performed well in the NY session, also defying gravity. The DJIA is currently up 0.52% and the S&P 500 is up 0.22% at the time of writing, off their lows of the day. As such, the bird was able to shrug off the disappointing outcome from the bi-weekly  GDT price index, which fell 0.7% in the previous auction, and declined a further 1.3% today.  

When it comes to the Kiwi specifically, there is little rhyme  nor reason to its detachment, but the antipodeans  on  back  on the defence and USD/CNH is testing a key support area at 6.8810 – a break will open 6.8750 and hat should create a good buffer zone for the antipodeans  vs the greenback.   On the other hand, should the DXY close above 95.32, (78.6% fib level), there could be some more downside in the antipodeans  to come ahead of the nonfarm payrolls at the end of the week.  

NZD/USD levels

Support 0.6590.  Resistance  0.6720.

The bird holds around 0.66 the figure, (a 50%  fibo  extension level of the early Sep extension’s retracement down at 0.65 the figure to 0.6699, the 21st Sep high). The pair was capped at 0.6639 on Friday, (the 38.2% fib of same 0.65/6699 range) and below there, the outlook stays bearish.  Meanwhile, immediate support is located at 0.6590 and was broken down to 0.6575 earlier (S2 0.6572). The bears  can target 0.6570 again ahead of 0.6555 and 0.65 the figure thereafter.