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  • NZD/USD’s reversal from multi-month highs at 0.6580 tests support at 0.6400.
  • The kiwi is going through a downside correction after a nearly 10% rally over the previous three weeks.
  • The grim economic forecast by the US Fed and the OECD have crushed the NZD.

The New Zealand dollar’s recovery attempt seen during Friday’s Asian session has been short-lived. The pair has been rejected at 0.6475 before pulling back again, to test support at 0.6400 which, so far is holding the pair’s correction from multi-month highs at 0.6585 earlier this week.

The grim economic forecasts released by the US Federal Reserve have battered the risk-sensitive kiwi, winding up a three-week rally that pushed the pair nearly 10% up. Today, a similarly pessimistic report by the OECD has dampened market sentiment further, increasing negative pressure on the NZD.

So far, the pair is going through a 2% correction from June’s peak, testing support at 0.6400. Below here bears might gain confidence, driving the pair towards 0.6365 (Jun. 3 low) and then at the 200-day MA 0.6315.

On the upside, immediate resistance lies at the mentioned 0.6475 (Jun. 9 low) and above here, in the area of 0.6520/30 before multi-month highs at 0.6580.

 

NZD/USD 4-hour chart

NZDUSD 4-hour chart

NZD/USD key levels to watch

 

 

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