• Kiwi fails to recover versus US dollar, back at monthly lows.
• Consolidation under 0.6600 to keep the pair under pressure.
• US dollar rises across the board as US stocks drop sharply.

The NZD/USD erased all the bounce and is back at the 11-week low area, under 0.6600. Earlier on Tuesday, the pair climbed to 0.6644, hitting a two-day high, but it reversed and turned again to the downside as market sentiment deteriorated.

Risk aversion weighs on NZD/USD

The US dollar is among the top performers on Tuesday boosted by risk aversion. The DXY trades at the highest level since March 2020 above 102.00, even as US yields decline sharply. The Dow Jones is falling by 1.68%, and the Nasdaq plummets 3.22% ahead of important earnings reports.

The rally in Treasuries is not affecting the dollar. The US 10-year stands at 2.74%, and the 30-year at 2.83%, levels not seen since April 14. The greenback remains strong as the move is being driven by deterioration in market sentiment and not by a change in expectations regarding Federal Reserve’s monetary policy.

The NZD/USD will likely remain under pressure while below 0.6600. It recently dropped to 0.6578, hitting the lowest level since early February. It is hovering near the lows. The next support might be located at 0.6560 followed by the 2022 low around 0.6530.

Technical levels