NZD/USD attempting to pick up from 0.5920 lows

• NZD/USD bounces up after hitting a new low at 0.5920.
• New Zealand dollar weakens on risk aversion and the RBNZ’s dovish message.
• The Reserve Bank of New Zealand opens the door to negative rates.

The New Zealand dollar is trying to pick up from one-week lows at 0.5920, after extending its two-day downtrend from 0.6130, to levels around 0.5950 so far. On the bigger picture, however, the NZD/USD remains under bearish pressure hurt by the downshift in market sentiment and RBNZ hints at the possibility of negative interest rates.

Negative market sentiment and the RBNZ hurt the NZD/USD

The NZD/USD turned down from 0.6130 highs on Tuesday, to put an end to a seven-day rally from 0.5845, and has lost more than 3% over the last two days, reaching a weekly low at 0.5920. The pair lost steam as the positive sentiment seen last week turned into risk aversion after the IMF warned that the COVID-19 shutdown could cause the largest economic slump since the Great Depression.

Furthermore, the dovish comments by the Reserve Bank of New Zealand Governor, Andrew Orr, opening the doors to negative interest rates, have increased selling pressure on the kiwi.

NZD/USD remains biased lower

On a technical perspective, the NZD/USD is seen biased to the downside, with relevant support levels at 0.5920 (intra-day low) and below here, 0.5840 (April 3 low) and 0.5780 (March 26 low). On the upside, immediate resistance lies at 0.5995 (intra-day high) and beyond here, 0.6060 (April 10, 13 lows) and then 0.6130 (April 14 high).

 NZD/USD key levels to watch