NZD/USD portrays a corrective pullback from a 14-month low of around 0.6690 but stays depressed after a four-day downtrend to early Wednesday morning in Asia.

The kiwi pair’s latest consolidation could be linked to the day-end bounce in riskier assets after a heavy risk-off session. However, the bears keep control as pre-Fed anxiety escalates. Also weighing on the risk appetite, as well as the NZD/USD prices, are the escalating fears of a Russia-Ukraine was and downbeat economic forecasts by the International Monetary Fund (IMF).

The kiwi pair struggles to overcome the multi-day low printed during the last two days.

Given the bearish MACD signals and downbeat RSI, not oversold, the NZD/USD prices have further downside room, which in turn highlights the 61.8% Fibonacci Expansion (FE) of the pair’s moves between November 15, 2021, and January 13, 2022, near 0.6650.

It at all the NZD/USD bears refrain from stepping back past 0.6650, a descending trend line from September 2021 and November 2020 lows, respectively around 0.6615 and 0.6590, will gain the market’s attention.

Meanwhile, corrective pullback needs to cross the year 2021 bottom surrounding 0.6700 before heading towards a downward sloping resistance line from January 13, near 0.6735.

If the NZD/USD bulls cross the 0.6735 hurdle, tops marked since late November close to 0.6900 should flash on their radar.

In the meantime, elevated US Treasury bond yields should continue to underpin the greenback. This, along with the broader market risk sentiment, might provide some impetus to the NZD/USD pair and allow traders to grab some short-term opportunities.

Kiwi Failed to Provide an Impulsive Breakout at 0.6700

Jan 26 2022