- Renewed US-China trade uncertainty exerted some fresh pressure on Monday.
- Dismal data strengthened the case for RBNZ rate cut and added to the selling bias.
- Near-term oversold conditions extended some support and helped bounce off lows.
The NZD/USD pair remained depressed through the early North-American session, albeit has managed to rebound around 20-25 pips from multi-year lows set earlier this Monday.
The pair added to its recent losses and opened with a mild bearish gap at the start of a new trading week in reaction to renewed uncertainty over the US-China trade, which forced investors to move away from perceived riskier currencies - like the Kiwi.
Further weighed down by RBNZ rate cut speculations
It is worth mentioning that reports on Friday indicated that the US Administration was looking to restrict capital flows into China and de-list Chinese companies from the US exchanges, though the US Treasury officials denied any such plans.
This coupled with deepening political uncertainty in the United States, especially after the start of an impeachment inquiry against President Donald Trump, further weighed on investors' sentiment and exerted some pressure on the major.
Meanwhile, the New Zealand Dollar was further weighed down by the disappointing release of ANZ Business Confidence Index, which fell to 11-1/2 year low in September and strengthened the case for a cut in interest rates by the RBNZ.
The pair dropped to as low as 0.6250 - levels not seen since September 2015 - but managed to find some support at lower levels. The uptick lacked any obvious catalyst and could be solely attributed to a technical bounce from near-term oversold conditions.
Hence, it will be prudent to wait for a sustained follow-through buying before confirming that a bottom has already been formed and positioning for any further near-term recovery as the focus now shifts to this week's important US macro releases.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.