NZD/USD: Testing support at 0.7160/70 as risk appetite fades
|- The New Zealand dollar closes a six-day rally, pulling back from 0.7215
- The USD picks up, favored by a moderate risk aversion.
NZD/USD: Upside bias remains positive while above 0.7160/70.
The New Zealand dollar is about to put an end to a six-day rally against its American counterpart, weighed by a weaker sentiment. The pair has retreated from four-month lows at 0.7215 and is looking for support above previous highs at 0.7160/70.
Risk aversion weighs on the kiwi
The NZD/USD is losing momentum on the back of sourer market sentiment on Thursday as the optimism triggered by the upbeat earnings reports released earlier this week, has faded. Wall Street is trading mixed following disappointing earnings data by the technological firm IBM which has revived concerns about supply chain disruptions.
Beyond that, ongoing concerns about Evergrande’s crisis in China extending into the country’s property sector are keeping demand for the risk-sensitive kiwi restrained. The threat of a deeper liquidity crisis continues gripping the sector; with news about more defaults popping up which is triggering declines on the bonds of most companies of the sector.
NZD/USD: Support art 0.7160/70 maintains the positive bias intact
From a technical perspective, the pair remains strong while above 0.7160/70 (September 3, 10 high). Below there, a further retreat below the 200-day SMA, at 0.7090 area would increase negative pressure and might send the pair to test the psychological level at 0.7000.
On the upside, immediate resistance remains at 0.7220 (Intra-day high) and then 0.7240 (Jun. 7 high), which would clear the path towards 0.7315 (May 23 high).
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.