The New Zealand Dollar (NZD) depreciates for the third consecutive day against a stronger US Dollar (USD) on Wednesday, hitting lows below 0.5900.
The Kiwi is showing the weakest performance among major currencies with tensions between the US and Iran crushing risk appetite, and US data endorsing expectations of Federal Reserve (Fed) rate hikes
The US military targeted Iran’s Qeshm Island following attacks from Iran that produced significant damage and several wounded people at Kuwait’s International Airport. Beyond that, Al Jazeera news agency has reported an Israeli attack on the outskirts of Beirut, which puts the fragile ceasefire under significant pressure. Geopolitical woes have offset the positive impact of the bright Chinese Services Purchasing Managers’ Index (PMI) seen earlier on Wednesday.
In the US, the strong manufacturing activity and job opening reports seen in previous days add to the case for Fed tightening later this year, and provide additional support to the US Dollar. Technical Analysis: Kiwi comes under growing pressure NZD/USD trades at 0.5896 after breaking support at the 0.5910 area earlier on Wednesday, which confirms the bearish near-term bias. The 4-hour Relative Strength Index (RSI) extends its decline below 40, and the Moving Average Convergence Divergence (MACD) slips deeper into negative territory, both hinting at growing downside pressure.