NZD/USD: Bears eye 0.7000 amid weaker oil & equities

The Kiwi extends its retreat from three-week highs into a second day today, as the bears retain control and now eye a test of 0.70 handle.

NZD/USD sold-off into risk-aversion

Over the last hours, NZD/USD is seen making minor-recovery attempts, in the wake of upbeat dairy auction results, however, the sentiment remains dampened by risk-aversion, as the Asian equities track the Wall Street sell-off. Demand for higher-yielding currencies such as the NZD reduces in times of risk-aversion, as investors resort to safe-havens to park their funds.

Moreover, with commodities under pressure, especially oil and copper prices, the commodity currency takes a hit. Oil fell in Asia on the back of an unexpected build in the US crude stockpiles, as reported by the API late-Tuesday. Meanwhile, copper prices fell to fresh weekly lows on concerns over increased supplies in the short-run.

The major will continue to get influenced by the broader market sentiment ahead of the US existing home sales data, as attention gradually turns towards the RBNZ monetary policy decision due tomorrow.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7095/0.7100 (100-DMA/ zero figure), above which it could extend gains to 0.7145/55 (50 & 200-DMA) and from there to 0.7200 (zero figure). To the downside immediate support might be located at 0.7000/0.6996 (round figure/ 10-DMA) and from there to 0.6973/63 (Jan 16 & 17 low), below 0.6859/ 50 (Dec 23 low/ psychological levels) would be tested.