• Broad-based USD strength prompts some aggressive selling.
• A slump in commodity prices adds to the downward pressure.
The NZD/USD pair continued losing ground through the mid-European session and tumbled to over two-week lows, around the 0.6725 area in the last hour.
Having repeatedly failed to build on/sustain its up-move beyond 20-day SMA, the pair came under some intense selling pressure on Thursday and was being weighed down by a broad-based US Dollar strength.
Upbeat economy outlooks from the Fed Chair Jerome Powell and the central bank’s Beige Book report, coupled with a goodish pickup in the US Treasury bond yields continued underpinning the buck and seems to have prompted some aggressive long-unwinding trade.
Moreover, a slight deterioration in investors’ risk-appetite, as depicted by a negative trading sentiment around equity markets, further benefitted the greenback's safe-haven appeal and drove flows away from perceived riskier currencies - like the Kiwi.
Meanwhile, the ongoing slump in commodities exerted some additional downward pressure on commodity-linked currencies - like the Kiwi and was seen collaborating to the pair's steep decline on Thursday.
Moving ahead, today's second-tier US economic data - Philly Fed Manufacturing Index and the usual initial weekly jobless claims, seems unlikely to have any meaningful impact but might still be looked upon for some short-term trading opportunities.
Technical levels to watch
The 0.6715 level is likely to act as an immediate support, below which the pair is likely to accelerate the fall back towards retesting over 2-year lows, around the 0.6690-85 region.
On the flip side, immediate resistance is now pegged near the 0.6755-60 area, which if cleared might trigger a short-covering bounce back towards 20-day SMA hurdle, currently near the 0.6800 handle.
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 remains under pressure from RBA rate decision
AUD/USD spiked lower by more than 20 pips following the RBA rate announcement to test the key psychological support at 0.6600. Losing this key level could see the currency pair trek lower towards the 100-hour EMA support near 0.6580.
USD/JPY extends recovery above 154.00, focus on Fedspeak
The USD/JPY pair trades on a stronger note around 154.10 on Tuesday during the Asian trading hours. The recovery of the pair is supported by the modest rebound of US Dollar to 105.10 after bouncing off three-week lows.
Gold price extends its upside as markets react to downbeat jobs data
Gold price extends its recovery on Tuesday. The uptick of the yellow metal is bolstered by the weaker US dollar after recent US Nonfarm Payrolls (NFP) data boosted bets that the Federal Reserve would cut interest rates later this year.
Bitcoin miner Marathon Digital stock gains ground after listing by S&P Global
Following Bitcoin miner Marathon Digital's inclusion as an upcoming member of the S&P SmallCap 600, the company's stock received an 18% boost, accompanied by an $800 million rise in market cap.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.