NZD/USD bears lean in as US Dollar remains firm with eyes on Fed's Powell

NZD/USD looks to the Aussie for clues ahead of key events.
The RBA minutes and Fed chair testimony will be in focus.

Ross J Burland FXStreet

The New Zealand Dollar fell to a low of 0./6101 on Monday and is currently down by 0.5% to 0.6200 after hitting a three-week top last week.

Markets are looking to a slew of domestic economic data this week, including New Zealand's trade balance for May and Reserve Bank of Australia minutes.

The US Dollar moved higher last week and on Monday following a number of monetary policy decisions by central banks. In this regard, Federal Reserve Chair Powell will present the Semiannual Policy Report to Congress. He is expected to reiterate that the Committee is likely leaning toward higher policy rates this year.

''Note that despite that message the FOMC decided to pause rate hikes in June, and we are of the view that it will be unlikely they lift them again under a context of easing inflation in Jun-Aug,'' analysts at TD Securities said.

The dollar index, DXY, which measures the U.S. currency against six major counterparts, ticked up 0.3% to 102.55, sitting just shy of a one-month low of 102.00 it touched on Friday.

AUD leading Kiwi higher

AUD has been a top performer, helping to support the Kiwi. The Reserve Bank of Australia’s recent surprise rate hikes have helped to bolster the Antipodeans. Additionally, the release of a stellar Australian jobs report is also suggestive of further policy moves that can help lead the Bird higher.

In regards to the RBA, the minutes will be released this week and analysts at TD Securities explained that, ''in the June statement, the Bank dropped “medium-term inflation expectations remains well anchored” which read hawkish to us, and we can expect a lively discussion. Mentions of the impact of the 5+% minimum wage hike on the wage outlook will be closely watched as the recent strong job gains nudges the odds higher of another hike in Jul due to the risk of elevated wage pressures.''

As for the Reserve Bank of New Zealand, the central bank ''has been a strong advocate of front loading rate hikes and was the very first G10 central bank to begin its rate hiking cycle,'' analysts at Rabobank added. ''Bad weather and teachers strikes have recently added to the impact of tighter credit conditions.''

NZD/USD

Overview
Today last price	0.62
Today Daily Change	-0.0011
Today Daily Change %	-0.18
Today daily open	0.6211

Trends
Daily SMA20	0.6118
Daily SMA50	0.6178
Daily SMA100	0.6218
Daily SMA200	0.6152

Levels
Previous Daily High	0.625
Previous Daily Low	0.6209
Previous Weekly High	0.625
Previous Weekly Low	0.6076
Previous Monthly High	0.6385
Previous Monthly Low	0.5985
Daily Fibonacci 38.2%	0.6225
Daily Fibonacci 61.8%	0.6235
Daily Pivot Point S1	0.6196
Daily Pivot Point S2	0.6182
Daily Pivot Point S3	0.6155
Daily Pivot Point R1	0.6238
Daily Pivot Point R2	0.6265
Daily Pivot Point R3	0.628

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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