NZD/USD struggles near 1-week lows, just above 0.60 mark

• NZD/USD came under some heavy selling on Wednesday amid resurgent USD demand.
• Technical selling below the 0.6060 horizontal support aggravated the bearish pressure.
• Market participants now look forward to the US economic releases for a fresh impetus.

The NZD/USD pair dropped to near one-week lows during the early European session, with bears now looking to extend the slide further below the key 0.60 psychological mark.

The pair came under some intense selling pressure on Wednesday amid a strong pickup in the US dollar demand and has now retreated around 130 pips from near one-month tops set in the previous session.

The latest optimism over a steady trend down in the new coronavirus cases and deaths across the world turned out to be short-lived. The same was evident from a fresh wave of the global risk-aversion trade.

This comes on the back of growing market concerns about the economic fallout from the coronavirus pandemic and eventually provided a strong boost to the greenback’s status as the global reserve currency.

Worries over an imminent global recession resurfaced after the IMF on Tuesday said that the pandemic could cause the world economy to shrink by 3% in 2020, the biggest collapse since the Great Depression.

Apart from this, possibilities of some short-term trading stops being triggered below strong horizontal support near the 0.6060 region further aggravated the intraday bearish pressure surrounding the pair.

Moving ahead, market participants now look forward to the US economic docket, highlighting the releases of monthly retail sales and industrial production figures, for some short-term trading opportunities.

Technical levels to watch