- NZD/USD gains strong positive traction on Tuesday amid fresh selling around the dollar.
- Less hawkish Fed hike expectations and a positive risk tone weigh on the safe-haven USD.
- The fundamental background supports the prospects for further bullish movement in the pair.
The pair NZD/USD receives aggressive buying on Tuesday and stops its recent pullback from near the 0.6300 level, a three-month high hit last week. The intraday recovery remains uninterrupted throughout the first half of the European session and lifts the pair back to the 0.6250 region.
The US dollar is struggling to take advantage of the previous day’s strong rebound from the all-important 200-day SMA and is met with fresh selling which in turn provides a nice boost to the NZD/USD pair. A dovish assessment of the November FOMC meeting minutes, released last week, cemented the market expectations for a relatively minor rate hike of 50 basis points, in December. This triggered a further decline in US Treasury yields and continues to weigh on the dollar.
Apart of this, A modest recovery in global risk sentiment is seen as another factor weighing on the safe-haven USD and benefiting the NZD, sensitive to risk. Investors are optimistic about the speculation that the Chinese government is considering relaxing its strict anti-covid policies. This follows from stable performance in European stock markets, although concerns about a deeper global economic downturn could limit any positive move.
On the other hand, the previous day’s remarks from Fed officials, aggressive in tone, could provide some support for the dollar. It is worth recalling that St. Louis Fed President James Bullard, New York Fed President John Williams, and Fed Vice President Lael Brainard reiterated that more rate hikes were justified to combat inflation. Having said that, record 75 basis point rate hike by the Reserve Bank of New Zealand (RBNZ) last week favors NZD/USD bulls and supports the prospects for further increases in the pair.
Market participants are now awaiting the release of the US Conference Board Consumer Confidence Index, due later in the American session. This, along with US bond yields and broader market risk sentiment, will weigh on the dollar and provide some lift to the NZD/USD pair. However, attention will remain focused on Fed Chairman Jerome Powell’s speech on Wednesday and important US economic data this week, including Friday’s NFP report.
NZD/USD technical levels
NZD/USD
Overview | |
---|---|
Last price today | 0.6243 |
today’s daily change | 0.0084 |
Today’s daily change in % | 1.36 |
today’s daily opening | 0.6159 |
Trends | |
---|---|
daily SMA20 | 0.6058 |
daily SMA50 | 0.5847 |
daily SMA100 | 0.602 |
daily SMA200 | 0.6299 |
levels | |
---|---|
previous daily high | 0.6246 |
previous daily low | 0.6155 |
Previous Weekly High | 0.629 |
previous weekly low | 0.6087 |
Previous Monthly High | 0.5874 |
Previous monthly minimum | 0.5512 |
Daily Fibonacci of 38.2% | 0.619 |
Daily Fibonacci of 61.8% | 0.6211 |
Daily Pivot Point S1 | 0.6128 |
Daily Pivot Point S2 | 0.6096 |
Daily Pivot Point S3 | 0.6037 |
Daily Pivot Point R1 | 0.6219 |
Daily Pivot Point R2 | 0.6278 |
Daily Pivot Point R3 | 0.631 |
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.