NZD/USD Resumes Bearish Trend, Eyes Fresh Ytd Lows

The NZD has resumed it's downward trend, and is testing ytd lows around 0.5970-60 due to soft market conditions affecting risk-sensitive assets. After a brief recovery on Friday, the Kiwi resumed its bearish trend on Monday, with sellers pushing the pair towards the 0.5870-60 support area.

• The NZD/USD saw selling pressure on Monday during the European session, with a moderate risk off tone causing a rally in the USD on the back of weakness in European equity indices, the pair finished Monday's session down 0.20% at 0.5876 and has now sold off 8 of the past 10 sessions.
• The pair traded in a 40-pip range, reaching a low of 0.5858 vs the ytd lows of 0.5852. The pair remains in a bearish trend, trading well below all key moving averages, the 14-day RSI is the lowest its has been since Sept 2022 at 24.5 while the MACD indictor has held steady over the past few sessions.
• Looking at technical levels, a break below 0.5852 (April 19th / ytd lows) would open a move to 0.5800 (Oct 26 lows) while to the upside a break of 0.5900 would be needed to see some form of a reversal
• The OIS market is a touch firm today with a 68% chance of a cut in August and cumulative 78.5bps of cuts into year end.
• The NZ-US 2yr swap spread reached a new low on Friday of -16bps, we currently sit just off lows levels at -11bps.
• Today the calendar is empty