NZD/USD bounces from four-week lows, still below 0.6300

• The kiwi trims losses against the dollar and the DXY falls.
• Wall Street turns negative after the first few minutes of trading.
• NZD/USD moves away from lows and moves without clear direction.

The pair NZD/USD it bounced after touching the lowest level since late November at 0.6199, rising to 0.6285. The rebound lost steam as US markets turned negative after the first half hour of regular trading on Wall Street.

The kiwi remains in negative territory against the dollar, with a fall of 50 points. NZD/USD is trying to recover 0.6250/60, a key technical level. If it doesn’t, bearish pressure could return. Support levels are seen at 0.6230 and then 0.6200.

Conversely, if the NZD/USD consolidates above 0.6280, I would focus on the next resistance seen around 0.6310.

Dollar moves away from lows, but still without giving up

The US dollar lost momentum, but has not shown enough conviction for a reversal thus far. The decline so far looks like a correction and could resume the bullish path, especially if US stock prices remain in the red. The DXY is up 0.85%, from highs at 104.40. It previously hit 104.85, the highest level since December 20.

US economic data showed the S&P Global Manufacturing Index stood at 46.2 in December, unchanged from the preliminary reading. Construction spending rose 0.2% in November, versus expectations of a 0.4% drop. On Wednesday the ISM manufacturing will be released and the Federal Reserve will publish the minutes of the last FOMC meeting.

The GDT price index fell 2.8% against market expectations of a 0.6% increase from the last auction in December.

technical levels