NZDUSD remains above 0.5800 amid modest dollar weakness ahead of NFP

  • NZDUSD regains positive traction on Friday and draws support from a combination of factors.
  • A modest USD pullback and positive risk tone offer some support for the risk sensitive Kiwi.
  • The aggressive outlook on the Fed should help limit USD losses and cap the pair ahead of the NFP.

The pair NZDUSD it attracts fresh buying near the 0.5755 region on Friday and reverses the previous day’s drop to more than a week’s low. The pair maintains its buying tone throughout the European session and is currently near the daily high above the level of 0.5800.

The US dollar pauses post-FOMC recovery and for now it seems to have snapped a six-day winning streak, which in turn offers support to the NZDUSD pair. A generally positive tone around equity markets weighs on the dollar as a refuge and benefits the Kiwi, sensitive to risk. Aside from this, the dollar’s decline could be attributed to a repositioning trade ahead of the US monthly employment report, due later in the American session.

Having said that, elevated US Treasury yields, bolstered by a more hawkish stance taken by the Fed, should cap any deeper USD pullback and limit the gains of the NZDUSD pair. It should be remembered that Fed Chairman Jerome Powell downplayed expectations of a dovish turn and said it was premature to talk of a pause in the rate hike cycle. Powell added that the terminal rate will remain higher than expected and caused a sharp rise in US Treasury yields.

Indeed, the two-year US government bond yield, highly sensitive to expectations of rising interest rates, hit a 15-year high on Thursday and approached the psychological 5% level. Meanwhile, the benchmark 10-year US Treasury bond remains above the 4.0% level and favors dollar bulls.

NZDUSD technical levels

NZD/USD

Overview
last price today 0.5814
daily change today 0.0042
Today’s daily variation in % 0.73
Daily opening today 0.5772
Trends
daily SMA20 0.5702
daily SMA50 0.5835
daily SMA100 0.6043
daily SMA200 0.6344
levels
Previous daily high 0.5843
Previous Daily Low 0.5741
Previous Weekly High 0.5874
Previous Weekly Low 0.5657
Previous Monthly High 0.5874
Previous Monthly Low 0.5512
Daily Fibonacci of 38.2% 0.578
Daily Fibonacci of 61.8% 0.5804
Daily Pivot Point S1 0.5728
Daily Pivot Point S2 0.5683
Daily Pivot Point S3 0.5625
Daily Pivot Point R1 0.583
Daily Pivot Point R2 0.5888
Daily Pivot Point R3 0.5932

Source: Fx Street

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