NZD/USD bulls attack 0.6500 as DXY slides to fresh monthly low
|- NZD/USD stays bid around monthly top marked earlier in the week.
- US dollar fails to rebound as traders fear US economic slowdown, Fed’s fixed path of 50 bps rate hikes.
- Market sentiment dwindles on headlines from China, Russia.
NZD/USD prints the biggest daily gains in four days as bulls poke the monthly high surrounding 0.6500 during Friday’s Asian session. In doing so, the Kiwi pair cheers broad US dollar weakness while paying a little heed to softer China data, as well as geopolitical concerns relating to Russia and Taiwan.
That said, the US Dollar Index (DXY) refreshes the monthly low at the 101.43 level as market participants welcomed the lack of uncertainty over the Fed’s next move with zeal. Also weighing on the greenback could be the recently downbeat US data.
The US preliminary Q1 2022 Annualized GDP eased to -1.5%, below -1.4% prior and -1.3% forecasts, whereas the Pending Home Sales slumped in April, to -3.9% versus -2.0% forecast.
Elsewhere, China’s Industrial Profits for the January-April period dropped to 3.5% versus 8.5% prior whereas the figures for April slumped to -8.5% versus 12.2% previous gains.
It should be noted that risk appetite remains mixed and should have weighed the NZD/USD prices but does not. Among the risk-negative negative catalysts are headlines suggesting the US-Taiwan ties, which China dislikes. On the same line are the fears of a global recession. Additionally, Russia’s refrain from stepping back and Ukraine’s readiness to fight more also keeps weighing on the sentiment.
Amid these plays, the US 10-year Treasury yields remained indecisive around 2.75% while the S&P 500 Futures print mild losses around 4,050, down 0.10% intraday at the latest.
Looking forward, the US Dollar Index weakness and mixed catalysts may keep NZD/USD sellers hopeful ahead of the US Core Personal Consumption Expenditure (PCE) Price Index for April, expected at 4.9% YoY versus 5.2% prior.
Read: US Core PCE Preview: Why there is room for a dollar-lifting upside surprise
Technical analysis
Sustained trading beyond the two-week-old rising trend line, around 0.6410, directs NZD/USD buyers towards the 0.6565-70 resistance area comprising the monthly high and the 50-day EMA.
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