NZD/USD dips towards 0.6800 amid a mixed market mood

Following Monday’s 100-pip rally, the NZD/USD is set to end the week with losses, despite an upbeat market mood spurred by Russia’s President Putin saying that the discussions with Ukraine had taken a positive turn. Later it crossed the wires that Ukrainian Foreign Minister Dmytro Kubela said on Friday that “there had been zero progress in talks with Russia on Thursday,” reported Bloomberg. At 0.6812, the NZD/USD reflects the sudden shift in the market towards a risk-off

Meanwhile, the greenback remains bid, at 98.960 up 0.45%, eyes to finish the week above the 99 mark. Furthermore, rising US Treasury yields, led by the 10-year sitting at 1.979%, weighed on the commodity-linked NZD.

In the Asian session, the New Zealand macroeconomic docket featured the Business Performance of Manufacturing Index, which rose to 53.6 in February. “Underlying unease will certainly be piqued by the sustained high COVID case numbers as we go into March. The next PMI result may also see fallout from the Russia/Ukraine conflict, whose global impacts will be felt far and wide,” BNZ Senior Economist, Craig Ebert

The US economic docket featured the University of Michigan Consumer Sentiment for March, which declined from 62.8 in February to 59.7, while Inflation expectations rose to 5.4% from 4.9% in the previous reading. This was the lowest UoM Consumer Confidence reading since November of 2011, as inflation expectations rose sharply due to a surge in fuel prices exuberated by the Russian invasion of Ukraine.

NZD/USD Price Forecast: Technical outlook

Overnight, the NZD/USD seesawed in a narrow range. However, the NZD/USD broke downwards once European trading began, dipping towards the 200-hour simple moving average (SMA) and extending its losses beyond that level as bears eye the February 23 high previous resistance/support at 0.6809.

That said, the NZD/USD is neutral-downwards biased, as bulls/bears battle to reclaim the 100-day moving average (DMA) around 0.6824.

In the event of a daily close below the 100-DMA, the NZD/USD first support would be 0.6809 the February 23 resistance/support. Breach of the latter would expose the 50% Fibonacci level at 0.6777, followed by the confluence of the 50-DMA and the 50% Fibonacci level around the 0.6733-43 area.

Otherwise, the NZD/USD first resistance would be March 9 daily high at 0.6752. Once cleared, the following resistance areas would be January 13 high at 0.6890 and the YTD high at 0.6925.