NZD/USD bears are waiting to move in to keep pressures on below 0.6300

NZD/USD is down on the day as we enter the end of the North American session as the markets tussle with the prospects of higher for longer inflation in the United States and watch the Fed pivot disappear over the horizon.

At the time of writing, NZD/USD is trading at 0.6280 and is down some 0.8% on the day after falling from a high of 0.6337 to a low of 0.6252. The US Dollar, as measured in the DXY index, broke to the topside in the wake of strong US Retail Sales on the back of the prior day's Consumer Price index. Both reports saw bond yields there ratchet up another notch which has played into the hands of risk-off assets and the greenback.

Analysts at ANZ Bank said, ''regular readers will be aware that we have for some time been worried that the USD might re-firm if interest rate expectations there started rising and expectations for late-2023 rate cuts were to fade, and that’s what seem to be playing out.''

''But at the same time, unlike last year’s USD surge, this time we don’t have other central banks going slow – with the European Central Bank and Reserve Bank of New Zealand both on track to hike by 50bp at their next meetings,'' the analyst explained further. ''That, and valuations, may cap (but perhaps not stop) USD upside, but counting on that could be risky.''

NZD/USD technical analysis

Meanwhile, there are prospects of a move lower.

While below resistance, the odds are for a move into the low 0.62s following the break of structure. a correction is in process currently, but if bears commit, say below 0.6300, then a sell-off from the region of a 50%, 61.8% ratio could be on the cards for the day ahead.