NZD/USD sinks to fresh lows of 0.6835 in European trading
The broad dollar strength and souring risk tones are continuing to pressure NZD/USD on the day, with the pair now slipping to fresh lows for the year at 0.6835.
The break below the 0.6900 and key support at 0.6880 is setting off a further downside leg in the pair and from a technical perspective, there is still room to roam.
The 0.6800 level comes in as a natural psychological support but it may not offer much opposition to sellers, with not much on the technical board before getting to the 61.8 retracement level near 0.6700.
The weekly chart highlights the 200-week moving average at 0.6758 so perhaps that may be an area of interest for buyers to defend but below that, the 100-week moving average comes in at 0.6700 – which coincides with the key support outlined above.
NZ PM Ardern made some promising remarks earlier, as it seems like they have uncovered the source of the latest COVID-19 outbreak and are working to trace all exposures in the coming days/weeks; forecast suggests roughly 50 cases.
That’s a positive step in dealing with the virus situation and will be one welcome by the RBNZ before their next meeting in October, as policymakers are hoping that they would be able to get back on track towards hiking rates after putting that off yesterday.
That said, it is tough to fight the technical picture and one especially with the dollar riding high across multiple fronts at the moment. Perhaps the kiwi is better suited to find a footing against other major currencies but against the greenback, the momentum is largely favouring the latter and likely will stay that way until we get to Jackson Hole next week.