- A combination of factors exerted some pressure around NZD/USD for the third straight day.
- COVID-19 jitters, a pickup in the US bond yields continued underpinning the safe-haven USD.
- A generally positive risk tone helped limit any further downside for the perceived riskier kiwi.
The NZD/USD pair maintained its offered tone through the early European session and was last seen hovering near the lower boundary of its intraday trading range, around the 0.6900 mark.
The pair failed to capitalize on the previous day's late rebound from the 0.6880 region, or the lowest level since November 2020, instead met with some fresh supply on Wednesday. This marked the third consecutive day of a negative move – also the fourth in the previous five – and was sponsored by a combination of factors.
Investors remain worried about the potential economic fallout from the spread of the highly contagious Delta variant of the coronavirus. This, along with a sudden pickup in the US Treasury bond yields, continued acting as a tailwind for the safe-haven US dollar and exerted some downward pressure on the NZD/USD pair.
However, a generally positive tone around the global equity markets extended some support to the perceived riskier kiwi. This, in turn, helped limit any deeper losses for the NZD/USD pair, at least for the time being, and warrants some caution for aggressive bearish traders amid absent relevant market-moving economic data.
Hence, it will be prudent to wait for some follow-through selling below the overnight swing lows, around the 0.6880 region, before positioning for any further depreciating move. The NZD/USD pair might then accelerate the downfall further towards testing the next relevant support near the 0.6800 horizontal resistance breakpoint.
Technical levels to watch
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