NZD/USD slides towards 0.6800 amid mixed mood

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  • NZD/USD falls as traders head into the weekend, down 0.71% on the week.
  • The lack of progress in the Russia-Ukraine talks would keep investors on their toes for at least another week.
  • NZD/USD Technical Outlook: The pair is neutral with the 100 DMA in play.

After Monday’s 100 pip rally, the NZD/USD will end the week with a loss, despite an upbeat market mood buoyed by Russian President Putin, who said talks with Ukraine had taken a positive turn. Ukraine’s Foreign Minister Dmytro Kubela later said Friday that “there was no progress in talks with Russia on Thursday,” Bloomberg reported. At 0.6812, the NZD/USD reflects the sudden shift in the market towards risk aversion.

Meanwhile, the dollar remains bid, at 98.960 rising 0.45%, with a view to ending the week above 99. Also, rising US Treasury yields, led by 10-year yields at 1.979 %, weighed on the commodity-linked NZD.

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In the Asian session, New Zealand’s macroeconomic docket featured the Manufacturing Trade Performance Index, which rose to 53.6 in February. “The underlying concern will certainly be aroused by the sustained high number of COVID cases as we move into March. The next PMI result may also see the fallout from the Russia/Ukraine conflict, the global impacts of which will be felt everywhere,” BNZ Senior Economist Craig Ebert.

The US economic calendar presented the University of Michigan consumer sentiment for March, which decreased from 62.8 in February to 59.7, while inflation expectations increased to 5.4% from 4.9% in the previous reading. This was the lowest UoM Consumer Confidence reading since November 2011, as inflation expectations rose sharply due to a spike in fuel prices triggered by the Russian invasion of Ukraine.

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NZD/USD Price Forecast: Technical Outlook

Overnight, the NZD/USD traded in a tight range. However, NZD/USD broke lower once European trading began, dipping towards the 200 hourly simple moving average (SMA) and extending its losses beyond that level, as shown by the previous high resistance/support of the February 23 at 0.6809.

That being said, NZD/USD has a neutral bias to the downside as bulls and bears struggle to recapture the 100-day moving average (DMA) around 0.6824.

In the event of a daily close below the 100 DMA, the first support for the NZD/USD would be 0.6809, the resistance/support from Feb 23rd. A breach of the latter would expose the 50% Fibonacci level at 0.6777, followed by the confluence of the 50 DMA and the 50% Fibonacci level around the 0.6733-43 area.

Otherwise, the first resistance of the NZD/USD would be the daily high of March 9 at 0.6752. Once cleared, the next resistance areas would be at the Jan 13 high at 0.6890 and the yearly high at 0.6925.

Additional technical levels

Source: Fx Street

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