NZD/USD plunges to the 0.6100 area awaiting FOMC Minutes

  • NZD/USD extends RBNZ-inspired slide and falls to 1-month lows.
  • A combination of factors continues to support the USD and contribute to the decline.
  • Investors are now awaiting the FOMC meeting minutes for further directional momentum.

The pair NZD/USD adds to their heavy intraday losses and falls to almost a month lows during the early hours of the North American session on Wednesday, with bears now waiting for a break below 0.6100 before placing further bets.

The New Zealand Dollar (NZD) is under intense selling pressure in reaction to the dovish rate from the Reserve Bank of New Zealand (RBNZ), which signals that it has finished its most aggressive cycle of increases since 1999. Furthermore, the RBNZ expects the The official cash rate hits its current level, which, coupled with a generally weaker risk tone, weighs on the risk-sensitive Kiwi and drags the NZD/USD pair lower for the second day in a row.

Market sentiment remains fragile amid concerns about slowing global economic growth, especially in China. In fact, data from China last week indicated that the world’s second-largest economy underperformed in April. On top of this, US debt ceiling issues dampen investor appetite for riskier assets. The countercurrent to risk manifests itself in a further decline in equity markets which, in turn, benefits the safe-haven dollar (USD).

In addition, rising expectations that the Federal Reserve (Fed) will keep interest rates higher for longer have pushed the dollar index (DXY), which measures the dollar’s price against a basket of currencies, to two-year highs. months and have contributed to the strong supply tone surrounding the NZD/USD pair. Current market prices indicate a slim chance of another 25 basis point hike in June, with bets boosted by recent hawkish comments from a number of Fed officials.

Therefore, market attention will remain focused on the release of the FOMC meeting minutes, scheduled for later in the US session. Investors will be looking for clues on the Fed’s future rate hike path, which will play a key role in influencing near-term USD price dynamics and provide a significant boost to the NZD/USD pair. However, a moderate reversal by the RBNZ suggests that the path of least resistance for the pair is to the downside.

technical levels

NZD/USD

Overview
Last price today 0.6122
Today Change Daily -0.0126
today’s daily variation -2.02
today’s daily opening 0.6248
Trends
daily SMA20 0.6237
daily SMA50 0.623
daily SMA100 0.6273
daily SMA200 0.6156
levels
previous daily high 0.6303
previous daily low 0.6233
Previous Weekly High 0.6306
previous weekly low 0.6117
Previous Monthly High 0.6389
Previous monthly minimum 0.6111
Fibonacci daily 38.2 0.626
Fibonacci 61.8% daily 0.6277
Daily Pivot Point S1 0.622
Daily Pivot Point S2 0.6191
Daily Pivot Point S3 0.6149
Daily Pivot Point R1 0.629
Daily Pivot Point R2 0.6332
Daily Pivot Point R3 0.636

Source: Fx Street

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