NZD/USD dips below 200-hour EMA, Asian markets sell risk
- The NZD/USD is down 0.32 percent in Asia, while the S&P 500 futures are reporting a 0.48 percent drop.
- The USD is on the rise against most majors as the USD/CNH remains bid, despite the rally in the Chinese stocks.
The NZD/USD pair is feeling the pull of gravity in Asia, courtesy of the risk aversion in the equities and weakness in the Chinese yuan.
At press time, the pair is trading at the session low of 0.6543 - down 0.32 percent on the day - having registered a 0.86 percent drop yesterday.
The losses the NZD and other risk currencies are likely associated with the dark mood in the equities. For instance, the S&P 500 futures are down 0.42 percent at press time. Further, Japan's Topix is down 1 percent and Australia's S&P /ASX 200 has shed 0.6 percent.
Meanwhile, the losses in Chinese yuan could be adding to the bearish pressure around the NZD/USD pair. Moreover, the risk-on rally in the Chinese stocks has not translated into CNY (or CNH) strength, leaving the USD/CNH (offshore yuan exchange rate) on the path toward the major psychological hurdle of 7.00.
Should the CNY witness a sudden reversal in fortunes, then the NZD and other risk currencies will likely pick up a strong bid.
NZD/USD Technical Levels
Resistance: 0.6562 (50% Fib R of 0.67/0.6424), 0.6594 (61.8% Fib R of 0.67/0.6424), 0.6599 (50-day EMA)
Support: 0.6538 (38.2% Fib R of 0.6424/0.6611), 0.6523 (Oct. 19 low), 0.65 (psychological level)
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
