NZD/USD bounces at 0.6550 and trims losses to approach 0.6600

• NZD/USD finds support at 0.6550 and returns to 0.6585 area.
• The kiwi has regained lost ground d favoured by USD weakness.
• Longer-term, FX specialists at UOB see NZD's downward momentum picking pace.

The New Zealand dollar has shrugged off the negative pressure seen earlier today and bounced up from 0.6550 to trim previous losses and return to levels near 0.6600.

USD weakness gives some respite to the NZD

The kiwi found support at the mid-range of 0.6500 earlier today and managed to pick up, favoured by the positive shift in market sentiment. Equity markets turned around after a negative opening in Europe, with wall street following the trend and posting gains beyond 1%.

The moderate upbeat mood has favoured riskier currencies like the NZD in detriment of the US dollar, which has also suffered amid the uncertainty regarding the US stimulus negotiations. US House Speaker, Nancy Pelosi set Tuesday as the deadline, which reduces the chances of reaching a deal before the Presidential Elections.

NZD/USD downward momentum picking up pace - UOB

From a longer-term perspective, the FX management team at UOB NZD downward momentum improving: “While downward momentum has improved tentatively, NZD ‘has to close below 0.6570 before a more sustained down-move can be expected’. Looking forward, the next support below 0.6570 is at 0.6545. On the upside, a break of 0.6660 (no change in ‘strong resistance’ level) would indicate that the current mild downward pressure has eased.”

Technical levels to watch