NZDUSD has been depreciating for a sixth day in a row - the longest losing streak in over three months. The currency pair is trading barely above the 0.67 figure on Monday and it looks as if the longer-term down trend has resumed.
The US dollar feels relatively comfortable at the current levels. The key risks for the greenback are the prolonged US government shutdown and amore ‘dovish’ stance by the Federal Reserve. On the other hand, traders so far shrug off the potential consequences from the political crisis in the country, while much of the expected pause in hiking rates is priced in already. Therefore, the downside potential for the greenback looks limited at the moment.
Meanwhile, the NZD could fall further amid fresh signs of slowing growth in China and lack of progress in trade talks on the intellectual property issues. As such, should the risk aversion resume, the pair could lose the 0.67 level for the first time since early January. In this case, another bearish breakthrough will be a confirmation that the bearish trend has resumed. To prevent this scenario, NZDUSD needs to catch a bid around 0.6720 and get back above the 0.6760 area but the downside risks prevail in the short term.
The US dollar feels relatively comfortable at the current levels. The key risks for the greenback are the prolonged US government shutdown and amore ‘dovish’ stance by the Federal Reserve. On the other hand, traders so far shrug off the potential consequences from the political crisis in the country, while much of the expected pause in hiking rates is priced in already. Therefore, the downside potential for the greenback looks limited at the moment.
Meanwhile, the NZD could fall further amid fresh signs of slowing growth in China and lack of progress in trade talks on the intellectual property issues. As such, should the risk aversion resume, the pair could lose the 0.67 level for the first time since early January. In this case, another bearish breakthrough will be a confirmation that the bearish trend has resumed. To prevent this scenario, NZDUSD needs to catch a bid around 0.6720 and get back above the 0.6760 area but the downside risks prevail in the short term.