NZD/USD has extended Thursday’s losses to 0.7287 levels as dovish RBNZ led to the narrowing of NZ-US 2-yr yield spread
US 2-yr yield is resilient
Three dissenters at Fed and a hint of Dec rate hike has ensured the 2-year treasury yield remains resilient near 0.78%. On the other hand, the 2-yr yield in New Zealand dropped sharply after RBNZ talked up rate cut bets.
Consequently, the Kiwi came under pressure on Thursday and is losing height once again in Asia. At the time of writing, the pair was trading around 0.7290 levels.
NZD/USD Technical Levels
On the daily chart, we see multiple daily lows in the range of 0.7234-0.7250, thus making it a strong support zone, which if breached would expose 0.72 (zero figure). Next major support comes around 0.7163 (Daily pivot S3).
On the higher side, a move back above 0.7309 (5-DMA) would shift risk in favor of a re-test of 0.7370 (weekly high). A violation there would open doors for 0.7485 (Sep 7 high).
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