NZD/USD extends reversal to 0.6650, lowest in a week
- Kiwi is among the worst G10 performers on Monday, affected by risk aversion.
- NZD/USD reverses sharply from highest in over a year, erases last week gains.
The NZD/USD is having the worst day since March on Monday, making a reversal after trading on Friday at the highest since March 2019. In a few hours, it erased all of last week gains. Recently bottomed at 0.6650, the lowest level in more than a week.
The kiwi is the biggest loser in the G10 space on Monday. Risk aversion and the fact that last week it outperformed, is affecting NZD significantly. Also technical factors are playing a role.
In the US, the Dow Jones falls 810 points or 2.95% and the S&P 500 declines 2.15%. Commodities area also sharply lower with the WTI barrel falling 5% and gold 3%. The key event ahead for the NZD/USD is the Reserve Bank of New Zealand meeting on Wednesday but it could be offset by current market volatility if persists.
Technical levels
From a technical perspective, the NZD/USD is back under the 20-day moving average, ending a six-day winning streak. The momentum now favors more losses ahead. Below 0.6650, the next support stands at 0.6635 followed by the September low at 0.6600. On the upside, 0.6715 is again a resistance level to take into consideration.
On a wider perspective, NZD/USD needs to break and consolidate above 0.6800 to clear the way to more gains. The trend is still bullish but the short-term bias, if the current decline is confirmed, will point to some consolidation ahead.
More levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
