New Zealand Dollar sinks to two-month low as Greenback firms
NZD/USD trades lower on Tuesday, changing hands near 0.5780, down around 0.6% on the day. The pair has slipped below 0.5760 to its lowest level since mid-July, after giving back ground overnight from a session high near 0.5820.
The New Zealand Dollar (NZD) experienced a significant drop to its two-month low on Tuesday, reaching a low near 0.5780, a decline of approximately 0.6% for the day. This fall pushed the currency below 0.5760, its lowest point since mid-July, after it had previously retreated from a session high of around 0.5820 the previous day.
In the United States, traders were heavily betting on a Federal Reserve (Fed) rate hike scheduled for the week, a move that prompted a surge in the US Dollar (USD) and a rise in US Treasury yields. The NZD, one of the most sensitive major currencies to changes in risk appetite, bore the brunt of this shift. Meanwhile, China was set to release Industrial Production and Retail Sales data for August later in the day, with production anticipated to increase to 4.8% from 4.5% and retail sales expected to grow as well.
A stronger set of numbers, particularly if industrial production rebounds, could provide some respite for the NZD and offer relief from selling pressure driven by the US Dollar. However, weaker data could exacerbate the downside, potentially pushing the currency closer to the 0.5750 area, the level reached on Monday's session low.
On the 4-hour chart, NZD/USD was trading at 0.5778, maintaining a bearish short-term outlook, as it remained below both the 20-period Simple Moving Average (SMA) at 0.5811 and the 100-period SMA at 0.5890. The Relative Strength Index (RSI) of the pair was near 30.8, indicating emerging oversold conditions that might slow the decline instead of triggering a sustained recovery, given that these moving averages continue to act as resistance.
On the upside, the immediate resistance levels are identified at 0.5781 and 0.5790, with the 20-period SMA at 0.5811 acting as a broader ceiling ahead of the 100-period SMA at 0.5890 and additional horizontal barriers at 0.5907, 0.5930, and 0.5965. On the downside, the immediate support level is at 0.5772, with a break below this level exposing the next structural support at 0.5766.
A decisive move above the clustered resistance band would alleviate the current bearish pressure. The technical analysis for this story was assisted by an AI tool.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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