NZD/USD pares some Monday’s losses but pullbacks towards the 61.8% golden ratio
|- The New Zealand dollar snaps two days of consecutive losses, gaining 0.26%.
- The NZD/USD sits between the 50% and the 61.8% Fibonacci levels ahead of the FOMC.
- NZD/USD Price Forecast: Neutral-downward biased, though it appears to consolidate pre-Federal Reserve monetary policy announcement.
The NZD/USD trims some of Monday’s losses, bouncing off daily lows near the 50-day moving average (DMA), grinding higher during the North American session. At 0.6762, the NZD/USD does not reflect the market sentiment, which turned mixed on headlines out from Eastern Europe, as portrayed by European equities finishing with losses, while US bourses rise.
Russia-Ukraine tensions increase as Putin contradicting earlier news
Developments in Eastern Europe appointed to continuing talks between Russia and Ukraine, but the fighting remained. Elsewhere, the Ukrainian air force claimed that a Russian drone crossed into Poland before returning to Ukraine, it was shot down by air defenses, while Russia’n Minister of Defense reported that they had taken control of Kherson Ukraine, according to Sputnik.
However, in the last couple of hours, Russian President Vladimir Putin said that Kyiv is not serious about finding a mutually acceptable solution, contradicting with news in the couple of days, which appointed to progress in discussions between Russia and Ukraine.
In the Asian session, the New Zealand economic docket featured the Business NZ Performance of Services Index, which rose to 48.6 in February of 2022 from an upwardly revised 46 in the prior month, marking the seventh straight contraction for the Kiwi services sector and well below the long-term average of 53.6.
Across the pond, the US docket revealed the Producer Price Index (PPI) for February, which rose by 10%, matching market expectations and staying at levels not seen since 1981. The rise in US Consumer and Producer Price indexes would further cement the Federal Reserve case to increase rates on Wednesday, as money market futures have priced in at least a 25 basis points hike.
NZD/USD Price Forecast: Technical outlook
Overnight, the NZD/USD traded in the 0.6720-50 area, though late in the European session, witnessed a jump towards daily highs at 0.6792, short of the 0.6800 mark, as FOMC Wednesday’s meeting looms. Despite that, the New Zealand dollar showed some strength, in line with the US equity markets behavior, the pair is neutral downwards, with the 200 and the 100-day moving averages (DMAs) residing above the exchange rate.
That said, the NZD/USD first support would be the 61.8% Fibonacci retracement at 0.6743. Breach of the latter would expose the 50-DMA at 0.6724, followed by the 78.6 Fibonacci at 0.6693.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.