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NZD/USD weakens farther below 0.6300 handle, back closer to multi-year lows

  • The pair remains under some heavy selling pressure for the third straight day.
  • Trade pessimism/cautious mood further collaborated to the pair’s weaker tone.
  • The ongoing slide seemed rather unaffected by some renewed USD selling bias.

The NZD/USD pair added to its recent losses and has moved well within the striking distance of multi-year lows, set earlier this September.
 
The pair extended its recent sharp pullback from mid-0.6800s, or near one-month tops, and remained under some heavy selling pressure for the third consecutive session on Friday - also marking its seventh day of fall in the previous eight.

Trade pessimism offset weaker USD

The market reaction to Thursday's upbeat release of New-Zealand second-quarter GDP growth figures turned out to be rather short-lived, with renewed trade pessimism exerting some follow-through downward pressure on the Kiwi.
 
The overnight contradicting statement by two White House advisers, followed by China’s warning to the US for its intervention in the Hong Kong issue raised doubts over any breakthrough from the upcoming talks in early-October.
 
This coupled with the prevalent cautious mood, amid a further escalation of geopolitical tensions in the Middle East, further collaborated towards driving flows away from perceived riskier currencies - like the New-Zealand Dollar.
 
Meanwhile, the ongoing downward trajectory seemed rather unaffected by some renewed selling bias around the US Dollar, which remained on the defensive on the back of sliding US Treasury bond yields and despite a hawkish rate cut by the Fed.
 
It will now be interesting to see if the pair is able to attract any buying interest at lower levels or the ongoing downfall marks the resumption of the prior/well-established bearish trend amid absent market-moving economic releases from the US.
 
Later during the US session, a scheduled speech by Boston Fed President Eric Rosengren might influence the USD price dynamics and contribute towards providing some impetus on the last trading day of the week.

Technical levels to watch

 

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