- NZD / USD declines from the 200 DMA as the US dollar cuts early losses.
- The US Dollar Index advances to new year-to-date highs around 95.44.
- NZD / USD Technical Outlook: A break above the 200 DMA would expose the 2021 high at 0.7465.
The NZD / USD It is back from three-day highs around 0.7100, although it remains in bullish territory, up 0.07%, trading at 0.7051 during the American session at the time of writing. In the past few hours, a surge in US Treasury yields backed the dollar against the US dollar index.
DXY is trading at new highs for the year around 95.40
The US dollar index, which measures the value of the dollar against a basket of its peers, advanced 0.31%, standing at 95.42 and hovering around the year’s highs at 95.44.
During the Asian and European session, the NZD rebounded, topping around 0.7080 as the US dollar fell under pressure, following weaker-than-expected University of Michigan consumer confidence data, which fell to lows of 10. years amid higher inflation. Also, in the aforementioned sessions, falling US Treasury yields sustained the dollar, which fell to three-day lows against the kiwi.
However, when US traders arrived at their desks, amid a light US economic schedule, demand for the dollar increased, thus dragging the NZD / USD pair lower, to last Friday’s high of 0.7048. Meanwhile, the US 10-year benchmark rose three basis points to 1,613%.
This week, the Federal Reserve begins its bond reduction, while the Reserve Bank of New Zealand (RBNZ) will host its last monetary policy of the year on November 24. The central bank monetary policy divergence between the Fed and the RBNZ would play a crucial role in the outlook for the NZD / USD pair, in which the NZD has the upper hand.
The market has valued a 100% probability of a 25bp increase from the RBNZ at its November meeting, but there is a slight 40% probability of a 50bp increase. By 2022, investors are fully priced for a 25bp increase in February, with a 70% chance of a 50bp increase.
NZD / USD Price Forecast: Technical Outlook
On the daily chart, the NZD / USD retreated from 0.7080 towards Friday’s high around 0.7048, within the 50- and 100-day moving averages (DMA). The daily moving averages (DMAs) remain directionless but provide support / resistance levels in the pair. However, as the 200 DMA remains above price, the pair is sloping lower, but remains almost horizontal, at risk of breaking down.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
