- NZD/USD fails to capitalize on the early uptick, rather met with some fresh supply.
- Bulls shrug off some USD weakness and took cues from the prevalent cautious mood.
The NZD/USD pair edged lower through the early European session and dropped to fresh daily lows, around the 0.6320 region in the last hour.
The pair failed to capitalize on the overnight attempted bounce from over four-month lows and once again met with some fresh supply near the 0.6355-60 horizontal resistance. The initial uptick was supported by some follow-through US dollar pullback from multi-year tops.
NZD/USD weighed down by coronavirus concerns
The USD largely shrugged off a goodish intraday pickup in the US Treasury bond yields and remained depressed for the third consecutive session on Tuesday amid speculations that the Fed could cut interest rates sooner rather than later.
Meanwhile, the early optimism led by a steep decline in coronavirus cases in China turned out to be short-lived as investors remain concerns about the negative impact of the virus outbreak, which seemed to be a key factor prompting some fresh selling at higher levels.
Given the prevailing cautious mood, as depicted by an intraday pullback in equity markets, it will be interesting to see if the pair continues to attract some buying near the 0.6300 round-figure mark or the current slide leads to a fresh bearish breakdown.
Later during the early North-American session, market participants will take cues from the US economic docket – highlighting the release of the Conference Board's Consumer Confidence Index – in order to grab some short-term trading opportunities.
Technical levels to watch
Bearish traders are likely to wait for a sustained break below the 0.6300 mark before positioning for any further slide towards the 0.6260-55 intermediate support en-route the 0.6200 round-figure mark. On the flip side, 0.6355-60 region might continue to act as a stiff resistance, above which the pair is likely to aim towards reclaiming the 0.6400 level.
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