- Resurgent USD demand triggers new selling around the NZD / USD on Tuesday.
- A softer risk tone puts additional pressure on the NZD of higher perceived risk.
The pair NZD / USD has lost some additional ground during the European session on Tuesday and has fallen to lows of more than two weeks, around the 0.7120 region.
The pair has not been able to capitalize on the positive movement of the previous day and has found new sales on Tuesday and now looks set to extend its recent pullback from the highest level since early March. Today’s movement marks the third day of negative movement of the previous four and is exclusively due to a strong rebound in demand for the US dollar.
Following the sharp pullback the day before from nearly two-week highs, the USD has regained strong positive traction amid speculation that the Fed could be forced to raise interest rates sooner rather than later. Despite a slowdown in growth in the US manufacturing sector, investors have begun to price expectations of higher interest rates in the US.
Apart of this, a softer tone in equity markets has provided an additional boost to the safe-haven USD and it has acted as a headwind for the NZD of higher perceived risk. With the latest move down, the NZD / USD pair has now fallen below the support of the 100-day SMA. Some continuation selling will set the stage for a new short-term bearish move.
Market participants are now awaiting the US economic calendar, which will feature second-tier releases such as the trade balance and factory orders at the start of today’s US session. This, along with broader market risk sentiment, will influence USD price dynamics and could lead to some short-term trading opportunities around the NZD / USD pair.
NZD / USD technical levels
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