NZD/USD breaches 0.6900 amid renewed USD strength, fresh eight-month lows

• NZD/USD hits fresh eight-month lows sub-0.6900.
• US dollar sees a fresh leg higher amid mixed markets.
• Oil-price sell-off, Delta covid strain fears weigh heavily on the kiwi.

Despite the risk-off flows ebbing slightly so far this Tuesday, NZD/USD continues to feel the pull of gravity and breaches 0.6900, reaching the lowest levels since November last year.

The kiwi remains the weakest across the G10 fx space, as a fresh spurt of buying in the US dollar seems to have collaborated with its latest leg down.

At the time of writing, the pair is flirting with eight-month lows of 0.6888, shedding 0.72% on the day. The spot reverses sharply from daily highs of 0.6965.

Meanwhile, a recovery in the risk sentiment is aiding the rebound in the US Treasury yields, lending support to the dollar bulls. The S&P 500 futures extend the bounce towards 4,300, now adding 0.43% on the day.

Monday’s sell-off in oil prices combined with fading RBA’s hawkish expectations could be also weighing on the Antipodean. With the Victoria lockdown extended and dovish RBA minutes, economists have pared back tapering expectations.

Looking ahead, the spot will continue to get impacted by the US dollar’s price action and broader market sentiment. Also, of note remains the US housing data and New Zealand’s GDT price index.

NZD/USD technical outlook

“Fresh declines will need to break the immediate support line near 0.6915 to aim for 61.8% Fibonacci Expansion (FE 61.8%) of the pair’s May-June declines, followed by a bounce until early July, close to 0.6860. It’s worth mentioning that the NZD/USD bears’ dominance past 0.6860 won’t hesitate to challenge the September 2020 tops near 0.6800,” FXStreet’s Analyst, Anil Panchal notes.

NZD/USD additional levels to watch