NZD/USD turns green despite heightened risk-off in Asia

• The NZD/USD defended 0.65 and is now reporting gains, possibly tracking gains in the Canadian dollar.
• The upside could be restricted by heightened risk aversion in the stock markets.

Currently, the NZD/USD pair is trading at 0.6525 - up 0.10 percent on the day -  having hit a low of 0.6502.

Bank of Canada's hawkish rate hike and the resulting rise in the Canadian dollar seems to have put a bid under other major commodity dollars - NZD and AUD.

However, risk aversion in equities could keep the gains under check.  At press time, the Asian equities are a sea of red. China's Shanghai Composite index fell more than 2 percent in early trade. Meanwhile, stocks in Australia and New Zealand are down 2.19 percent and 1.28 percent, respectively, and Japan's Nikkei has shed 3.38 percent.

Further, New Zealand's trade deficit rose to record highs in September and that could restrict the upside in the pair.

NZD/USD Technical Levels

Resistance: 0.6540 (10-day EMA), 0.6569 (Tuesday's high), 0.66 (psychological hurdle)

Support: 0.65 (zero level), 0.6442 (Oct. 10 low), 0.6424 (Oct. 8 low)