NZD/USD stops decline and recovers towards 0.5850

• The NZD/USD pair consolidated losses and rose almost 0.40% to 0.5850.
• The markets will remain calm on Monday, with no relevant events on the economic calendar.
• US economic activity data, including October S&P Globak PMIs, Q3 GDP and September PCE inflation, will be the highlight of the week.

Earlier in the week, the NZD/USD pair rose towards 0.5850, as the pair appears to face a period of consolidation after losing more than 1% last week. All eyes now turn to this week’s high-level U.S. data, including Tuesday’s manufacturing PMI, Thursday’s flash estimate of third-quarter gross domestic product (GDP), and U.S. personal consumption expenditures (PCE). September on Friday. On the Kiwi side, housing data including building permits for September will be released on Tuesday in the Asian session.

Meanwhile, the dollar appears to be struggling to gain momentum as markets bet on a less hawkish Federal Reserve (Fed) following Chairman Powell’s speech last week. He stressed that the high bond yields will be taken into account and that the entity will proceed “with caution” regarding upcoming decisions. Along these lines, according to CME’s FedWatch tool, the probabilities of a 25 basis point increase at the December meeting remain low and are around 30%, which makes the green currency lose interest. However, high-level economic numbers released this week will continue to shape expectations for the Fed’s next steps and set the pace for dollar price dynamics in the coming sessions.

NZD/USD Levels to watch

Looking at the daily chart, NZD/USD presents a neutral to bearish outlook as even though the bears have gained momentum recently, they could take a step back to consolidate the latest moves before the next bearish leg as the indicators they have become somewhat flat in negative territory.

The Relative Strength Index (RSI) indicates a neutral stance below its midline, showing a flat slope, while the Moving Average Convergence (MACD) shows stagnant red bars. Furthermore, the pair is below the 20-day, 100-day, and 200-day SMA, suggesting that the bears are in a favorable position on the broader scale.

Support levels: 0.5820, 0.5800, 0.5770.

Resistance levels: 0.5890, 0.5900, 0.5930 (200-day SMA).

NZD/USD Daily Chart