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NZD/USD struggles to find a firm direction, trapped in a range around 0.6300

  • NZD/USD is struggling to gain significant traction and is oscillating in a familiar range.
  • Cautious sentiment acts as a headwind for the risk-sensitive NZD amid a modest USD rally.
  • Reducing expectations of a more aggressive Fed rate hike could cap the USD and lend some support to the pair.

The pair NZD/USD extends its sideways move for the second day in a row on Tuesday and remains trapped in a range around the level of 0.6300 at the start of the European session on Tuesday.

Despite hopes that inflation is nearing its peak, investors remain concerned about rapidly rising interest rates and tightening financial conditions, which could pose a challenge to global economic growth. This was reflected in the cautious sentiment prevailing in equity markets, which in turn acted as a headwind for the risk-sensitive NZD.

However, the fall remains supported, at least for the moment, in the midst of the weak demand for the US dollar. The recent decline in commodity prices has eased concerns about persistently rising inflationary pressures. Apart from this, recession fears forced investors to cut their expectations for more aggressive rate hikes from the Fed, which weighed on the dollar.

The mixed fundamental background has, thus far, not helped the NZD/USD pair gain significant traction. Even from a technical point of view, the pair has been trading in a known range for the past two weeks, which makes it prudent to wait for a sustained move in either direction before opening new positions.

Market participants now await the US economic calendar, with the release of the Conference Board Consumer Confidence Index and the Richmond Manufacturing Index later in the American session. This, along with US bond yields and general risk sentiment, will weigh on the dollar and give the NZD/USD pair some lift.

However, the spotlight will remain on Fed Chairman Jerome Powell’s appearance on Thursday. Investors will be looking for new clues about the US central bank’s monetary policy tightening path. This will play a key role in driving short-term dollar demand and help determine the next directional move for the NZD/USD pair.

NZD/USD technical levels

NZD/USD

Panorama
Last Price Today 0.6297
Today’s Daily Change -0.0014
Today’s Daily Change % -0.22
Today’s Daily Opening 0.6311
Trends
20 Daily SMA 0.6379
50 Daily SMA 0.6437
100 Daily SMA 0.6624
200 Daily SMA 0.676
levels
Previous Daily High 0.6327
Previous Daily Minimum 0.6282
Previous Maximum Weekly 0.6365
Previous Weekly Minimum 0.6244
Monthly Prior Maximum 0.6569
Previous Monthly Minimum 0.6217
Daily Fibonacci 38.2% 0.6299
Daily Fibonacci 61.8% 0.631
Daily Pivot Point S1 0.6286
Daily Pivot Point S2 0.6262
Daily Pivot Point S3 0.6241
Daily Pivot Point R1 0.6331
Daily Pivot Point R2 0.6352
Daily Pivot Point R3 0.6376

Source: Fx Street

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