NZD/USD – Contemplating Friday’s slide, recovers to key Fibo hurdle

NZD/USD pair had a re look at 0.7334 (38.2% of 0.4891-0.8842) in Asia following Friday’s sharp losses that caught investors by surprise.

The American dollar was on the back foot for almost entire week before the yields at the long-end of the treasury curve spiked on Friday, thus sending risk assets – Kiwi, AUD, Stocks – lower.

Moreover, it was Fed’s Rosengren, a well known dove, which came out in support of a rate hike thus leading to a sharp rise in the US dollar. Kiwi clocked a high of 0.7485 last week before deflating to 0.7319 on Friday.

The currency pair was last seen trading around 0.7328.

NZD/USD Technical Levels

Acceptance above 0.7334 (38.2% of 0.4891-0.8842) would open doors for a revisit to 0.7380 (Aug high), above which a major hurdle is seen at 0.7413 (Friday’s high). On the other hand, a breakdown of support at 0.7314 (previous day’s low) would expose 0.7256 (Aug 2 high) and 0.7204 (Aug 30 low).