NZD/USD’s reversal from 0.5730 highs finds support at 0.5650
- The kiwi remains steady above 0.5650 after its reversal at 0.5730.
- The greenback appreciates as risk appetite fades.
- NZD/USD's broader outlook remains bearish – Credit Suisse.
The New Zealand dollar has trimmed some of the previous two days’ gains on Wednesday, weighed by a strong US recovery and a sourer market mood. Downside attempts, however, have been contained at 0.5650 so far.
The kiwi suffers against a stronger US dollar
The risk appetite observed at the start of the week waned on Wednesday, which has favored the US dollar on the back of its safe-haven status. The world’s major stock indexes have posted moderate gains following a two-day rally at the start of the week.
Furthermore, US Treasury bonds have pushed higher, with the benchmark 14-year note trading above 4% for the first time in 14 years. This, coupled with market hopes of another aggressive rate hike by the Fed in November, has increased the attractiveness of the USD.
NZD/USD’s broader outlook remains bearish – Credit Suisse
Analysts at Credit Suisse see the pair biased lower with the current upside correction limited at 0.5798/5813: “Whilst both daily RSI and MACD are holding bullish divergences, which suggests that the recovery will extend for now, our broader outlook remains outright bearish and we thus see this development only as a correction (…) “Whilst we expect a better near-term ceiling to be found at the 0.5798/5813 level, above here would see scope to test the falling 55-day average at 0.5978.”
Technical levels to watch