- The US dollar falls when Wall Street turns positive.
- The tensions in the financial markets are still on the table.
- NZD/USD bounces modestly, bearish bias persists.
The NZD/USD bottomed out during the US session at 0.6222, the lowest level since June 2020, and then recovered modestly to 0.6266, paring losses. The dollar moved higher across the board but remains firm amid a volatile financial market.
A recovery in stock prices on Wall Street helped NZD/USD. After a negative open, the S&P 500 turned positive. Risk aversion remains dominant amid fears about the global economic outlook with higher interest rates ahead.
US data showed the producer price index slowed from a multi-decade high of 11.5% to 11% in March (yearly); on a monthly basis, it was up 0.5%. Jobless claims showed a mixed picture: Initial claims hit an 11-week high of 203,000, while continuing claims fell to 1.343 million, the lowest level since 1970.
Short term outlook
Downside pressure remains and more losses below 0.6275 seem likely. The 4-hour 20 Simple Moving Average chart is at 0.6300; if the kiwi rises above it would ease the negative momentum in the short term. The next resistance is seen at 0.6335.
On the other hand, a drop below 0.6235 would expose the 0.6222 low. Next support could be located at 0.6190 (Feb 2020 low) and 0.6160.
Technical levels
Source: Fx Street
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