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  • The pair extended its recent pullback from three-month tops.
  • Deteriorating global risk sentiment added to the selling bias.
  • The bearish pressure remains unabated despite softer US data.

The NZD/USD pair held on to its weaker tone near three-week lows and had a rather muted reaction to softer US economic releases.

After the previous session’s directionless moves, the pair met with some fresh supply on Tuesday and extended its recent rejection slide from the vicinity of the 0.6800 handle, or three-month tops touched on July 19.

The fact that RBNZ is taking a looking at unconventional monetary policy, coupled with the prevalent bullish sentiment surrounding the US Dollar continued exerting some bearish pressure on the major.

Adding to this, a slight deterioration in the global risk sentiment, led by the US President Donald Trump’s negative trade-related comments, further drove flows away from perceived riskier currencies – like the Kiwi.

Meanwhile, Tuesday’s softer US economic data, showing that core PCE index (the Fed’s preferred inflation gauge) rose less than expected by 1.6% yearly pace in June, helped limit deeper losses, at least for the time being.

Tuesday’s US economic docket also features the release of the Conference Board’s Consumer Confidence Index, which again is unlikely to provide any meaningful impetus ahead of the highly anticipated FOMC meeting.

Technical levels to watch