- The NZD / USD fell back below 0.6800 in recent trading, although support has been ahead of the 21 DMA.
- The pair may struggle to achieve conviction this week amid weaker Christmas trading conditions.
- Next week’s big list of US data could offer a boost to currency markets.
The NZD / USD it has fallen back below the 0.6800 level in recent trading and is now fluctuating lower for the session by approximately 0.2%. The pair was unable to emulate its risk-sensitive peers, AUD / USD and GBP / USD, which managed to hit fresh December / multi-week highs early in the session. During the Asian session trading, the kiwi couldn’t even reach 0.6830, meaning it didn’t even come close to testing this month’s highs of 0.6867 recorded on December 1.
On the week, the NZD is now trading around 0.3% lower against the US dollar, compared to the Australian dollar, which is sideways, and the British pound, which is still up 0.3%. Compared to last week’s lows, NZD / USD was up 1.3% versus AUD / USD and GBP / USD, both of which are roughly 2.0% higher.
For now, the 21-day moving average at 0.6785 is likely to provide a bottom for the NZD / USD, and the currency markets are likely to remain well in range for the remainder of the session and perhaps the week. Many European and US market participants are absent this week for the Christmas / New Years celebrations, which means low liquidity and low volumes.
Currency markets are likely to find some more conviction next week, when the economic calendar fills up again. No notable New Zealand data for a few weeks, but the official December US labor market report and the December US ISM PMI surveys will be released next week. Both should point to the current strength of the US economy which should vindicate the Fed’s recent guidance that three rate hikes are possible in 2022.
The inability of the NZD / USD to rebound north of the recent December ranges suggests that in the new year when forex market volumes (and conviction) return, the pair will be vulnerable to a downward correction towards the lows. December just above 0.6700.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
