“¢ The recent escalation in the US-China trade tensions continues to weigh on Antipodeans.
“¢ The USD remained supported by the Fed’s patience stance and adds to the selling bias.
“¢ Oversold conditions helped limit further downside amid lighter US economic docket.
The NZD/USD pair remained on the defensive through the mid-European session on Thursday and refreshed yearly lows in the last hour, albeit recovered few pips thereafter.
The pair remained depressed below the key 0.6500 psychological mark and showed little signs of bearish exhaustion amid a combination of negative factors. The ongoing US-China trade dispute, further escalated by the news that the US is planning to blacklist five Chinese surveillance firms, had been one of the key factors weighing heavily on Antipodeans.
On the other hand, the recent US Dollar rally got an additional boost after the latest FOMC meeting minutes reiterated the Fed’s patient stance and showed no inclination to cut rates in the near future. This coupled with a fresh wave of global risk-aversion trade further collaborated towards driving flows away from perceived riskier currencies – like the Kiwi.
The pair touched an intraday low level of 0.6482 – the lowest since Oct. 26, 2018, albeit managed to find some support amid near-term oversold conditions and relatively thin economic docket – featuring the release of flash manufacturing & services PMI along with April new home sales data from the US.
Technical levels to watch