NZD/USD climbs to fresh two-week highs near 0.7250

NZD/USD extended its daily rally in the early American session.
US Dollar Index looks to snap two-day winning streak.
Risk-positive market environment weighs on safe-haven USD on Tuesday.

Eren Sengezer FXStreet

The NZD/USD pair broke above 0.7200 in the early European morning and preserved its bullish momentum in the second half of the day. After touching its highest level in two weeks at 0.7248, the pair seems to have gone into a consolidation phase and was last seen gaining 0.6% on a daily basis at 0.7240.

Risk flows hurt the DXY

The unabated selling pressure surrounding the USD fueled NZD/USD's daily rally on Tuesday. The US Dollar Index slumped to a daily low of 90.11 after major equity indexes in the US opened in the positive territory and made it difficult for the safe-haven greenback to find demand. At the moment, the DXY is down 0.25% at 90.17.

The data published by the Conference Board showed on Tuesday that the consumer confidence in the US improved modestly in January but was largely ignored by market participants.

There won't be any macroeconomic data releases from New Zealand on Wednesday and investors will shift their focus to the FOMC's policy announcements.

The Fed is largely expected to keep its policy unchanged. However, market participants will look for fresh clues regarding possible changes to asset purchases especially if the coronavirus relief bill gets delayed.

Fed Preview: Fearing market froth or boosting Biden's stimulus? Three scenarios.

Technical levels to watch for

NZD/USD

Overview
Today last price	0.724
Today Daily Change	0.0044
Today Daily Change %	0.61
Today daily open	0.7196

Trends
Daily SMA20	0.7168
Daily SMA50	0.7093
Daily SMA100	0.6883
Daily SMA200	0.6651

Levels
Previous Daily High	0.7217
Previous Daily Low	0.7171
Previous Weekly High	0.7226
Previous Weekly Low	0.7096
Previous Monthly High	0.7241
Previous Monthly Low	0.7002
Daily Fibonacci 38.2%	0.7199
Daily Fibonacci 61.8%	0.7188
Daily Pivot Point S1	0.7172
Daily Pivot Point S2	0.7148
Daily Pivot Point S3	0.7126
Daily Pivot Point R1	0.7219
Daily Pivot Point R2	0.7241
Daily Pivot Point R3	0.7265

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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