- The NZD/USD pair marks a daily high of 0.5869 before falling to 0.5825, losing 0.30% amid the strength of the Dollar.
- The US Dollar Index (DXY) gains 0.11% to 106.35, boosted by the Middle East conflict and good US economic data.
- US new home sales rose 12.3% month-over-month in September, contributing to the strength of the Dollar.
The pair NZD/USD extended its losses during the North American session after setting a daily high at 0.5869, but deteriorating market sentiment and the strength of the United States Dollar (USD) dragged the exchange rate towards 0.5825, with the pair losing 0.30%.
NZD/USD falls to 0.5825 and loses 0.30% as the US dollar strengthens and the conflict in the Middle East
Risk aversion continued to dominate price action, while the Dollar continued to rise, with the Dollar Index (DXY) gaining 0.11% to 106.35, boosted by the Middle East conflict. Although Israel has not begun its ground offensive in Gaza, an escalation is looming that could involve more participants than just Israel and Hamas.
In terms of economic data, the US agenda highlighted new home sales, which surprisingly rose 12.3% month-on-month in September, surpassing the previous month’s -8.2% contraction, the fastest pace since the beginning of 2022. These data, along with Tuesday’s S&P Global PMIs in the US, which reveal that business activity is improving, support the Dollar as the chances of a soft landing increase.
On the Kiwi front, news out of China supported a rise in NZD/USD towards its daily high, as President Xi Jinping visited the People’s Bank of China (PBOC), the Chinese central bank set to issue additional sovereign debt, as the country struggles to recover from the Covid-19 pandemic measures. However, the recovery was short-lived as sentiment turned sour.
NZD/USD Price Analysis: Technical Outlook
After forming an “evening star” chart pattern, the NZD/USD pair is resuming its downtrend, although it remains shy of extending its downtrend beyond the October 23 low at 0.5807. A break of the latter would expose the 0.588 figure, followed by the November 3, 2022 swing low at 0.5740. Conversely, if buyers recapture the October 24 high at 0.5872, 0.5900 will be in sight.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
