NZD/USD bears in control, targetting daily channel support
|- NZD/USD is on the offer and building the case for a test of channel support.
- The US dollar is bod on strong US yields, but it may be a shortlived theme for the greenback.
NZD/USD is under pressure in Tokyo as the US dollar firms some more following a strong performance in Wall Street ad the European session.
At the time of writing, NZD/USD is trading at 0.7194 between a low of 0.7182 and 0.7211, down some 0.2% on the session so far.
NZD/USD initially rose from 0.7240 to 0.7269, before falling to 0.7200 in New York.
The Kiwi has given back territory from a 6-week high On Monday as rising US bond yields take front and centre of the forex space, propelling the greenback to test recent resistance.
''A steeper yield curve is generally a good sign, but it was well expected and this looks more like a positioning move/retracement rather than the start of a big USD move,'' analysts at ANZ Bank argued.
Specifically for the kiwi, the analysts explained that the market has shown its capacity to look through the move to covid Levels 2/3 locally; ''that seems appropriate given how well-resourced the Government is to tackle any outbreaks. Higher milk prices overnight are a reminder of how well commodity prices are holding up.''
NZD/USD technical analysis
As per the prior analysis, NZD/USD Price Analysis: Trapped between daily support and resistance, the price remains in familiar territory offering opportunities on fading tops of the channel to target the lows:
(Prior analysis)
4-hour chart
Meanwhile, from 4-hour perspective, bulls could well tempt the commitments of the bears at this juncture as price meets support.
The expended M-formation would be expected to see a retracement to at least a 38.2% Fibonacci level which meets prior structure in the case above.
This may result in a bearish extension to the channel's bottom in an otherwise trapped market between daily support and resistance.
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