NZD / USD fails to sustain daily gains, falls below 0.7240

  • Kiwi loses momentum during the US session as stocks slide.
  • DXY remains positive supported by rising US yields.

The pair NZD / USD It failed to sustain daily gains and turned negative during the US session amid a rally in the US dollar and deteriorating risk appetite. The pair fell to 0.7220 and remains close to the low, under pressure as the VIX (fear index) jumps above 20.00.

Rising US yields propelled the US dollar into the market. The 10-year yield rose to 1.68%, hitting a two-week high, before declining modestly. The movement in the bond market picked up speed after the release of US economic data.

Economic data for the US was mixed. The economy grew at an annual rate of 6.4% during the first quarter. Initial jobless claims fell to 553,000 in the week ending April 24, slightly above expectations. Pending home sales increased 1.9% in March.

On Wall Street, stock prices are opening higher, driven by earnings and corporate data, and also following Wednesday’s FOMC statement. In the last few hours, risk sentiment deteriorated. At time of writing, the Dow Jones is down 0.18% and the Nasdaq 0.65%.

From a technical perspective, the NZD / USD reversal looks like a correction. The next support is at 0.7210 followed by 0.7185 / 90 (weekly low). A recovery above the 0.7250 area should add momentum to the kiwi. Critical resistance is still 0.7300.

Technical levels

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