NZD/USD slumps to daily lows near mid-0.65s as dollar preserves strength
- US Dollar Index surges above 96 in the NA session.
- Wall Street fails to stay in green, weighs on risk-sensitive currencies.
The NZD/USD pair came under a renewed selling pressure in the second half of the day as the greenback continued to gather strength. After spending the majority of the day in a relatively tight range below the 0.66 handle, the pair touched a fresh daily low in the last hour at 0.6544 and was last seen trading at 0.6550, where it was down 0.67% on a daily basis.
In the absence of significant macroeconomic data releases, investors stayed focused on the ongoing political concerns surrounding Italy's budget crisis and the uncertainty around Brexit negotiations to ramp up the demand for the greenback. After ending the previous week on a negative note, the US Dollar Index gained traction and rose above the 96 handle to reflect a broadly stronger dollar. The DXY, which touched a session top of 96.10, was up 0.4% on the day as of writing at 96.02.
Additionally, following a positive start to the day, major equity indexes in the U.S. reversed their direction and slipped into the negative territory to further weigh on risk-sensitive currencies such as the kiwi. At the moment, the S&P 500 and the DJIA are losing 0.2% and 0.55%, respectively.
Later in the week, the Statistics New Zealand will publish the September trade balance data. There are no other data releases this week from New Zealand that could impact the NZD's market valuation.
Technical levels to consider
The pair could face the first technical support at 0.6535 (Oct. 19 low) ahead of 0.6470 (Oct. 4 low) and 0.6430 (Oct. 5 low). On the upside, resistances align at 0.6580 (50-DMA), 0.6610 (Oct. 2 high) and 0.6655 (100-DMA).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
