NZD/USD: Supply capping minor-recovery near 50-DMA

Having witnessed a sharp 30-pips drop in early Asia, the NZD/USD pair embarked upon a minor-recovery mode thereon, now meeting fresh supply once again near 0.7270 region, where 50-DMA coincides.

NZD/USD keeps losses as sentiment deteriorates

Currently, the NZD/USD pair drops -0.32% to 0.7262, reverting to daily lows struck at 0.7254 at Tokyo-open. The Kiwi stalled its recovery mode, as the bulls ran into a strong resistance placed near 50-DMA at 0.7274 and now drives the spot deeper in the red, as risk conditions deteriorate amid tumbling oil prices and resurgence of Brexit fears into the markets.

Higher-yielding currencies such as the NZD tend to suffer from risk-off environment, as investors prefer to hold the safe-havens and give-up risk assets. Moreover, markets now price-in almost 80% chance of OCR cut by the RBNZ next month, raising odds than a few weeks ago, which also keeps the sentiment around the NZD undermined.

Focus remains on the US macro updates and risk-trends for fresh momentum on the major, while markets ignored the Chinese PMI reports released over the weekend.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7288 (20-DMA), above which it could extend gains to at 0.7332 (Sept 27 high). To the downside immediate support might be located at 0.7220 (Sept 23 & 26 low) and from there to at 0.7199 (100-DMA).