- The NZD/USD pair broke above 0.6200 despite the fact that the Dollar held firm.
- The United States reported better-than-expected housing and confidence data ahead of the FOMC decision.
- Announcements of China’s support policy package boosted the NZD.
On Tuesday, the pair NZD/USD It rallied despite the USD trading against most of its partners. Ahead of Wednesday’s Federal Reserve (Fed) decision, strong data was reported in the US that could cap the pair’s rise. On the Kiwi side, the NZD seems to be strengthening after the Chinese announcement of an economic support package that would benefit the Asian bloc.
Investors assess confidence and housing data ahead of FOMC decision
The United States reported strong housing and consumer confidence data in July. The Conference Board reported that the confidence of individuals in economic activity rose to 117, above the 112 expected and the previous 109.7. Elsewhere, the S&P/Case-Shiller House Price Index was lower but lower than expected in May, falling 1.7% versus -2.2% expected, while the Federal Housing Agency reported that its House Price Index rose 0.7% in the same month, beating consensus of 0.2%.
Ahead of the two-day Federal Reserve (Fed) meeting, markets expect a 25 basis point (bp) hike and a data-dependent approach from Chairman Powell, as a robust economy and tight labor market may prompt the Federal Open Market Committee to consider another hike in September.
Meanwhile, USD DXY continued to rise to 101.60 but then pulled back towards 101.40, still holding gains, while US Treasury yields traded mixed, with the 2y yield slightly down to 4.90%.
NZD/USD Levels to Watch
The outlook is leaning to the downside despite the fact that the pair accumulates two days of gains, according to the daily chart. The Relative Strength Index (RSI) is below its midline, while the Moving Average Convergence (MACD) prints bullish red bars. However, if the bulls manage to hold above the convergence of the 20- and 100-day SMAs above 0.6200, further gains may be in the offing.
Resistance levels: 0.6230, 0.6250, 0.6270.
Support levels: 0.6200, 0.6190 (100-day SMA), 0.6150.
NZD/USD Daily Chart
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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.
