NZD/USD bears trade below 0.6000 after US dollar strength and US CPI.

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  • The NZD bears are heading for a hard landing at the 0.60 level.
  • NZD is testing below the level with a low of 0.5986 so far, the lowest level since 2020.

The NZD/USD has sold off heavily on Tuesday to the lowest levels since 2020, down around 2.4% at the time of writing and falling from a high of 0.6161 to a low of 0.5986 as we head into the early Asian open on Wednesday. US data has been to blame for the dollar rising along with US yields. The Federal Reserve will make its policy decision known at the end of its two-day meeting next week, on September 20-21.

The rally in the US consumer price index (which was assumed by consensus to have peaked) slammed into financial markets overnight, pushing NZD/USD back below the key 0.60 level this week. tomorrow,” analysts at ANZ Bank noted.

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The data sent both the dollar and bond yields higher as expectations of an interest rate hike by the Federal Reserve were excessive. Inflation in the United States stood at an annualized rate of 8.3% in August, above expectations of an 8.0% rise. Markets are generally expecting 75 basis points when their monetary policy committee meets next week, lowering market hopes for a smaller hike.

However, there is a one in five chance that the Fed will raise rates by a full percentage point, up from zero a day before the CPI report, according to FEDWATCH. Analysts at Nomura said Tuesday that the Fed is likely to raise its short-term interest rate target by a full percentage point at its policy meeting next week, due to the emergence of upside inflation risks.

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The data makes next week’s Fed decision more uncertain (yesterday it looked much more certain), said analysts at ANZ bank. Analysts at ANZ bank note that New Zealand’s current account balance data they are the key of the day: “We expect a deficit of 7.5% of the Gross Domestic Product, and that is big.”

Technical levels

NZD/USD

Panorama
Last Price Today 0.6001
Today’s Daily Change -0.0135
Today’s Daily Change % -2.20
Today’s Daily Opening 0.6136
Trends
20 Daily SMA 0.6158
50 Daily SMA 0.6211
100 Daily SMA 0.6298
200 Daily SMA 0.654
levels
Previous Daily High 0.6159
Previous Daily Minimum 0.6084
Previous Maximum Weekly 0.6153
Previous Weekly Minimum 0.5996
Monthly Prior Maximum 0.647
Previous Monthly Minimum 0.6101
Daily Fibonacci 38.2% 0.613
Daily Fibonacci 61.8% 0.6112
Daily Pivot Point S1 0.6093
Daily Pivot Point S2 0.6051
Daily Pivot Point S3 0.6018
Daily Pivot Point R1 0.6169
Daily Pivot Point R2 0.6202
Daily Pivot Point R3 0.6244

Source: Fx Street

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