NZD/USD stays pressured near key support levels amid tepid risk mood

Technical Analysis

Author: Justin Low | nzdusd

NZD/USD keeps lower on the day as the risk picture remains cautious

NZD/USD D1 29-01
The kiwi was marked lower on the day amid AUD/NZD buying after the Australian Q4 CPI data earlier but it is now keeping lower as the risk mood continues to be more tepid and tricky in trading during the European morning session.

Bonds are seeing fresh flows again and that has pushed Treasury yields to session lows on the day. 10-year yields are down by over 4 bps to 1.615% now:

That in turn is pushing yen crosses lower as well and is weighing on commodity currencies such as the aussie, kiwi and loonie.

For NZD/USD, price is still hanging on around support at 0.6521-29 with the 200-day MA (blue line) sitting close by @ 0.6511. The 0.6500 level will also offer some added layer of support but trading sentiment will largely depend on the risk mood now.

The offshore yuan is also trading near the lows for the day with USD/CNH seen at 6.9670 currently. Further pressure on the Chinese currency will also add to more woes for the kiwi amid the more tepid risk mood.

With the diverging signals in stocks and bonds today, it is leaving for mixed direction in trading but eventually, someone has to be right. In that lieu, we'll have to see who's got the right call and expect currencies to follow that once there is more clarity.

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