NZD/USD drops to 0.5930 on Monday. Efforts of the Federal system to strengthen US dollar and the US-China tension has lead to keep the pair in a bearish trend. Even New Zealand’s Business NZ Performance of Services Index (PSI) for April has added for the downside of the pair. The figures drop to 25.9 from 52.00 registered in February.

The Fed Chair Jerome Powell’s speech that recovery can take a while but don’t bet against American Economy and US President Donald Trump tweet “The number of Coronavirus cases is strongly trending downward throughout the United States, with few exceptions. Very good news, indeed!” has added to the strength of USD.

Also, the US-China tension plays a vital role among the global market players. US President continuously alleges China for the outbreak of coronavirus and on the other hand, China’s Global Times’ Editor called the dragon nation to develop nuclear weapons to possess enough capability so that the US will not proactively attack China.

All these catalysts have given kiwi this direction.

The pair fell by 3.34% last week to register its biggest weekly decline since the third week of March. More importantly, the last week’s candle has taken the shape of a big red marubozu candle, which is also engulfing the preceding week’s trading range.

NZD/USD 4 Hour Chart:

Support: 0.6035 (S1), 0.5993 (S2), 0.5891 (S3).

Resistance:  0.6137 (R1), 0.6197 (R2), 0.6300 (R3).

It is expected that kiwi will be in a bearish trend for a while.