NZD/USD struggles to register any meaningful recovery, hangs near multi-year lows

US-China trade pessimism continued exerting bearish pressure on Friday.
Sliding US bond yields undermined the USD and helped limit further losses.
Traders now look forward to Fedspeaks for some short-term opportunities.

Haresh Menghani FXStreet

The NZD/USD pair struggled to register any meaningful recovery and remained well within the striking distance of fresh multi-year lows set on Friday.

The pair added to its recent sharp losses and on Friday dropped to its lowest level since September 2015 amid doubts over any breakthrough from the upcoming US-China trade negotiations in early-October. The US President Donald Trump said that he is not interested in making a "limited" deal and was followed by news that China's delegation cancelled a visit to the US farms, which dampened prospects for an interim deal.

Subdued USD demand lends some support

Against the backdrop of fears of a further escalation of geopolitical tensions in the Middle East, the latest not so encouraging trade-related developments weighed on the global risk sentiment. This was evident from a weaker trading sentiment around equity markets, which eventually benefitted the US Dollar's relative safe-haven status and drove flows away from perceived riskier currencies - like the New Zealand Dollar.

Meanwhile, the global flight to safety triggered a fresh leg of a downfall in the US Treasury bond yields and kept the USD bulls on the defensive. A subdued USD price action turned out to be one of the key factors extending some support to the major and prompted some short-covering move on Monday amid near-term oversold conditions/absent relevant market moving economic releases.

The uptick, however, lacked any strong bullish conviction and the price action seems to suggest that the near-term bearish pressure might still be far from being over. Hence, any meaningful recovery attempt might still be seen as a selling opportunity as market participants now look forward to scheduled speeches by influential FOMC members for a fresh impetus later during the US session.

Technical levels to watch

NZD/USD

Overview
Today last price	0.6262
Today Daily Change	0.0004
Today Daily Change %	0.06
Today daily open	0.6258

Trends
Daily SMA20	0.6357
Daily SMA50	0.6477
Daily SMA100	0.6535
Daily SMA200	0.6657

Levels
Previous Daily High	0.6311
Previous Daily Low	0.6254
Previous Weekly High	0.6392
Previous Weekly Low	0.6254
Previous Monthly High	0.659
Previous Monthly Low	0.6283
Daily Fibonacci 38.2%	0.6276
Daily Fibonacci 61.8%	0.6289
Daily Pivot Point S1	0.6238
Daily Pivot Point S2	0.6217
Daily Pivot Point S3	0.6181
Daily Pivot Point R1	0.6295
Daily Pivot Point R2	0.6331
Daily Pivot Point R3	0.6352

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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