- NZD/USD picks up from 0.6585 lows and returns to 0.6635.
- The kiwi regains lost ground as market sentiment improves.
- On the longer term, NZD/USD remains sideways between 0.6600 and 0.6700.
The New Zealand dollar is trimming losses against the US dollar on Monday, following a three-day decline to 0.6585 lows. Intraday bearish attempts have been contained at 0.6615 and the pair returned to test intra-day high at 0.6635.
The kiwi picks up as market sentiment improves
The brighter market sentiment seen on Monday is favouring the risk-sensitive kiwi to trim losses after depreciating more than 1.5% last week. The upbeat Chinese and US manufacturing activity figures have offset fears of the COVID-19 spread which has reflected on the solid gains in the main equity indexes.
Beyond that, an unwinding of dollar long positions ahead of the US election might explain the moderate recovery staged by some risk assets. With only one day ahead of the election, investors are cutting their positions, sceptical of any prediction after the failure to anticipate Trump‘s victory four years ago and wary that a contested race may trigger sharp price movements.
NZD/USD remains rangebound between 0.6600 and 0.6700
From a technical point of view, the NZD/USD remains trading without a clear direction, trapped roughly between 0.6600 and 0.6700. On the upside, a bullish reaction past 0.6670 (October 30 high) should extend past 0.6720 (October 27 high) before testing key resistance at 0.6795 (September 18 high).
On the downside, below 0.6595 (October 29 low) bears might increase confidence and aim to 0.6550 (October 8 low) before testing 0.6485 (August 20 low).
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