Market risk-off sentiment saw an advantage for safe-haven currency trading, instead putting pressure on high-yielding currencies such as the New Zealand dollar (NZD) and the Australian dollar (AUD).
NZD currency traders ’hopes of seeing continued strengthening this week were dashed by declining performance again heading into the weekend.
On the chart of the NZD/USD currency pair, it can be seen that a significant increase was displayed in last Tuesday's trading following the market's reaction to the New Zealand central bank's (RBNZ) expectations that it will give an indication for policy tightening at next week's policy meeting.
The forecast for the RBNZ to raise interest rates this November has prompted a surge in the value of the Kiwi until the rise hit a high of 0.71000 on the NZD/USD chart.
However, the re -strengthening of the US dollar gave disappointment to investors who saw the price plummet back to the 0.70000 level.
The decline continued until Thursday yesterday which had recorded a weekly low lower than the level reached last week.
Continuing trading on the Asian session on Friday morning, the price made a lower decline testing the support zone in June around 0.69300 and a slight weak price increase towards the opening of the European session.
The zone is seen to support prices to rise again, however with risky sentiment putting pressure on the Kiwis will complicate the situation.
Should a rise occur, the price is seen heading back to the resistance level at 0.7000.
Exceeding the Moving Average 50 (MA50) barrier level in the 1 hour time frame of price movement will be an early indication for investors for the beginning of the uptrend again.
However, if the price declines below the support zone of 0.69300, the price will record the latest low since November 2020 with the expectation to head up to the level around 0.68300.
