- New Zealand dollar fails at 0.5740 and falls back to 0.5700.
- Kiwi trims losses as risk appetite fades.
- NZD/USD: Upside attempts capped below 0.5755 —UOB.
The New Zealand dollar is struggling to find acceptance above 0.5700 as the pair’s rebound from 0.5620 was capped at 0.5740 in the US session on Thursday. The pair remains positive on the daily chart, although the bullish momentum seems to have moderated.
Kiwi appreciated for risk appetite
Negative price action seen during the Asian session on Thursday gave way to a strong rally as market sentiment improved during the European session. The positive reaction to the news of the resignation of the UK Prime Minister, Liz Truss, has weighed on the dollar as a haven, taking the pair to levels above 0.5700.
However, risk trading has weakened throughout the US session as enthusiasm for Truss’s exit fades and the market acknowledges the political uncertainty in the UK. Equity markets have pulled back from session highs and the dollar is regaining lost ground, sending the sentiment-linked kiwi back to previous ranges.
NZD/USD is capped below 0.5750 — UOB
UOB analysts are skeptical about a meaningful NZD recovery in the short term: “Yesterday we highlighted that the NZD “could rise above 0.5725, but a sustained advance above this level still looks unlikely… Our Update from two days ago (Oct 18, spot at 0.5675) still stands. As we have highlighted, the NZD appears to have entered a consolidation phase and is likely to trade between 0.5570 and 0.5755 for now.”
Technical levels to watch
Source: Fx Street
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