NZD/USD slides on risk aversion, drops below 0.71

Flight to safety strengthened the bid tone around USD and pushed the NZD/USD pair below 0.71 handle and to a four-day low.

Down for second day

The pair is down for the second day as sharp fall in cable to a fresh 30-year low rattled markets and forced investors to pour money into traditional safe haven assets like treasuries. Consequently, the US dollar strengthened in Asia.

Meanwhile, New Zealand dollar had little reason to strengthen as the global dairy trade prices slipped 0.4% overall in the July auction. Critical whole milk powder prices fell for fourth time in a row. The pair remains at the mercy of the overall market sentiment ahead of the US ISM non-manufacturing report release/

NZD/USD Technical Levels

The immediate hurdle is seen at 0.7128 (10-DMA), above which prices could target 0.7147 (June 9 high). A break higher would expose 0.7241 (July 4 high). On the other hand, a breakdown of support at 0.7049 (Apr 20 high) could yield 0.70 handle. A break lower would expose 0.6936 (50-DMA).