- The NZD rises along with risk sensitive pairs like the AUD and GBP, the US dollar weakened.
- Fed Chairman Powell: “If we have to raise interest rates more over time, we will.”
- NZD / USD has a neutral-bearish bias as the pair faces the confluence of the 50, 100 and 200 moving averages on the 4-hour chart.
The NZD It rises slightly by 0.53% in the American session, as the president of the US central bank, Jerome Powell, testifies against the US Senate Banking Committee on his candidacy for the renewal of the appointment. At the time of writing this article, the NZD/USD cotiza a 0.6790.
Market sentiment improved since the start of President Powell’s hearing, and the US stock indices gained between 0.15% and 1.01%. Meanwhile, the US dollar lost its weekly gains, down 0.28% to 95,718.
In the bond market, US Treasuries are down, with the 10-year Treasury yield falling to 1.768%, a headwind for the dollar.
An absent economic agenda from New Zealand left the NZD / USD pair leaning on the discourse of the US Fed and the dynamics of market sentiment.
Atlanta Fed Chairman Raphael Bostic said he scored three raises at Tuesday’s December meeting. In addition, he agreed with his colleagues, the presidents of Cleveland and Kansas City, Loretta Mester and Esther George, respectively, that the balance should be reduced as soon as possible.
NZD / USD Price Forecast: Technical Outlook
The NZD / USD pair has a neutral downtrend. Bearishly sloping 4-hour SMAs converge around the 0.6790-95 area, a strong resistance level would be difficult for the NZD bulls to overcome.
In the event of breaking above the aforementioned area, the NZD bulls would challenge the 0.6800 figure, which once broken would expose the Jan 5 daily high at 0.6837, followed by the 50 DMA at 0.6872.
On the other hand, the first line of defense for the NZD / USD pair would be the 0.6700 level. A break below that figure puts downward pressure on the pair. The next support would be the October 2020 cycle lows around 0.6553.