NZD/USD recovery capped at 0.6380, back to square one

FXStreet (Mumbai) - NZD/USD fell back in the red zone in the European session, stalling a brief recovery seen in the late-Asian session, as persisting risk-off trades paired accompanied by NZ weak fundamentals continue to hammer the New Zealand dollar.

NZD/USD retests 0.6330 region

Currently, the NZD/USD pair trades -0.49% lower at fresh session lows of 0.6336, eyeing 0.63 handle. The Kiwi accelerates losses as the demand for higher yielding currencies reduced amid intensifying risk-off sentiment, in the run up to the Fed showdown.

Moreover, the New Zealand dollar also remains heavily offered versus the greenback as the European traders continue to weigh the weak NZ Q2 GDP report released in early Asia. New Zealand’s GDP expanded 0.4% in the June quarter, missing the expected growth rate of 0.6%.

Markets now await the key FOMC decision, where the Fed is likely to delay the lift-off as anticipated by most analysts. Besides, investors will focus on fresh economic projections, along with the dot plot.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6384 (Sept 16 High) levels and above which it could extend gains to 0.6400 (Sept 10 High) levels. To the downside immediate support might be located at 0.6291 (Today’s Low) below that 0.6268 (Sept 15 Low).