NZD/USD advances beyond mid-0.6000s, highest since August amid sustained USD selling


  • NZD/USD scales higher for the third straight day and climbs to over a three-month peak.
  • Bets that the Fed is done raising rates continue to undermine the USD and lend support.
  • The optimism over more stimulus from China also lends support to the antipodean Kiwi.

The NZD/USD pair attracts some follow-through buying for the third successive trading day on Tuesday and touched its highest level since August 11, around the 0.6060 area during the Asian session.

The US Dollar (USD) selling bias remains unabated in the wake of growing acceptance that the Federal Reserve (Fed) was done with its policy-tightening campaign. Moreover, the markets are now pricing in the possibility that the Fed will start cutting rates soon, as early as March 2024. This leads to a further decline in the US Treasury bond yields and drags the USD to a near three-month low, which, in turn, is seen as a key factor that continues to push the NZD/USD pair higher

Apart from this, the optimism over additional stimulus from China undermines the safe-haven buck and benefits antipodean currencies, including the New Zealand Dollar (NZD). In fact, Chinese officials vowed to roll out more policy support for the country’s beleaguered real estate sector. Furthermore, the People’s Bank of China (PBoC) held its benchmark Loan Prime Rate (LPR) near record lows on Monday and also injected about 80 billion Yuan of liquidity into the economy.

Despite the supporting factors, the NZD/USD pair is struggling to capitalize on the move beyond the 0.6050-0.6055 supply zone. Traders now seem reluctant to place aggressive bets and prefer to wait on the sidelines ahead of the FOMC meeting minute, due for release later during the US session amid the uncertainty over the timing when the Fed will begin cutting rates. Investors will get a fresh insight into policymakers' view on whether the US central bank should raise interest rates again.

The outlook, meanwhile, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the NZD/USD pair. Heading into the event risk, the US economic docket, featuring the release of Existing Home Sales data, will be looked upon to grab short-term opportunities during the early North American session.

Technical levels to watch

NZD/USD

Overview
Today last price 0.6061
Today Daily Change 0.0021
Today Daily Change % 0.35
Today daily open 0.604
 
Trends
Daily SMA20 0.591
Daily SMA50 0.5922
Daily SMA100 0.5999
Daily SMA200 0.6096
 
Levels
Previous Daily High 0.6044
Previous Daily Low 0.5978
Previous Weekly High 0.6055
Previous Weekly Low 0.5863
Previous Monthly High 0.6056
Previous Monthly Low 0.5772
Daily Fibonacci 38.2% 0.6019
Daily Fibonacci 61.8% 0.6003
Daily Pivot Point S1 0.5997
Daily Pivot Point S2 0.5954
Daily Pivot Point S3 0.5931
Daily Pivot Point R1 0.6063
Daily Pivot Point R2 0.6087
Daily Pivot Point R3 0.613

 

 

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