NZD/USD corrects further below 0.6650 as S&P 500 extends slide

• Risk aversion offers a relief to the US dollar, DXY slightly off lows.
• Kiwi hits two-day lows versus US dollar, tests support at 0.6630.

The NZD/USD pair is falling on Thursday ending a four-day rally. Earlier it peaked at 0.6689, the highest level since January and bounced to the downside. During the last hour, as US equity prices turned decisively negative, it dropped further hitting a fresh daily low at 0.6627.

As of writing, NZD/USD trades at 0.6630 amid a recovery of the US dollar. The greenback strengthened late during the American session as Wall Street indexes added to losses. The Dow Jones is losing now 1.45%, the S&P 500 1.40% and the Nasdaq 2.40%. At the same time, crude oil also extends the decline, with WTI falling by almost 2%:

It the deterioration in risk sentiment continues during the Asian session, NZD and AUD will likely remain under pressure. Data to be released on Friday include the June Trade Balance report in New Zealand.

Double top formation

The NZD/USD set up a double top formation in short-term chats slightly below 0.6690. It broke the neckline near 0.6650. The target is near the 0.6610 area but before there is an intermediate support at 0.6630. On the upside, resistance might be seen at 0.6660 and the recent top at 0.6690 followed by 0.6720.