NZD/USD struggles near multi-year lows, around mid-0.5800s

• NZD/USD remained under some heavy selling pressure amid sustained USD buying.
• Surging US bond yields, a rush to safety continued underpinning the USD demand.
• Extremely oversold conditions seemed to be the only factor lending some support.

The NZD/USD pair was seen oscillating in a narrow trading band around mid-0.5800s and consolidated its recent slump to near 11-year lows set earlier this Wednesday.

The pair added to its overnight losses and remained under some intense selling pressure for the second consecutive session on Wednesday amid a sustained US dollar buying across the board.

Some strong follow-through upsurge in the US Treasury bond yields, with the benchmark 10-year US government bond yield shooting beyond the 1.0% mark, provided a goodish lift to the USD.

The greenback was further supported by its status as the global reserve currency amid mounting fears over the economic fallout from the coronavirus pandemic and investors’ rush to hoard cash.

This coupled with a fresh round of selloff across the global equity markets further drove flows away from perceived riskier currencies, including the kiwi, and contributed to the intraday slide.

However, extremely oversold conditions on short/medium-term charts held investors from placing fresh bearish bets and seemed to be the only factor that helped limit further losses, at least for now.

Wednesday’s release of the US housing market data seems unlikely to provide any meaningful impetus, leaving the pair at the mercy of developments surrounding the coronavirus saga.

Technical levels to watch