NZD/USD drops to fresh one-week lows, approaches 0.6900 mark ahead of FOMC


  • NZD/USD witnessed some follow-through selling for the second straight session on Wednesday.
  • Rebounding US bond yields, risk-off mood benefitted the safe-haven USD and exerted pressure.
  • Investors keenly await the FOMC monetary policy decision before placing fresh directional bets.

The NZD/USD pair maintained its offered tone through the early North American session and dropped to fresh one-week lows, around the 0.6925 region in the last hour.

The pair extended the previous day's rejection slide from the key 0.7000 psychological mark and witnessed some follow-through selling for the second successive session on Wednesday. A combination of factors assisted the US dollar to regain positive traction, which, in turn, exerted some downward pressure on the NZD/USD pair.

Investors remain worried about the potential economic fallout from the fast-spreading Delta variant of the coronavirus. This was evident from the prevalent cautious mood around the equity markets, which was seen as a key factor that acted as a tailwind for the safe-haven USD and drove some flows away from the perceived riskier kiwi.

Apart from this, a goodish pickup in the US Treasury bond yields further underpinned the greenback amid some repositioning trade ahead of the highly-anticipated FOMC monetary policy decision. Given a surprise hawkish shift from the Fed in June, market players will look for fresh clues about the timing of tapering amid surging inflation in the US.

The announcement will be followed by the post-meeting press conference, where comments by Fed Chair Jerome Powell will play a key role in influencing the near-term USD price dynamics. This, along with developments surrounding the coronavirus saga, should assist investors to determine the next leg of a directional move for the NZD/USD pair.

Technical levels to watch

NZD/USD

Overview
Today last price 0.6928
Today Daily Change -0.0029
Today Daily Change % -0.42
Today daily open 0.6957
 
Trends
Daily SMA20 0.6983
Daily SMA50 0.708
Daily SMA100 0.7111
Daily SMA200 0.7089
 
Levels
Previous Daily High 0.7007
Previous Daily Low 0.694
Previous Weekly High 0.7004
Previous Weekly Low 0.6881
Previous Monthly High 0.7289
Previous Monthly Low 0.6923
Daily Fibonacci 38.2% 0.6965
Daily Fibonacci 61.8% 0.6981
Daily Pivot Point S1 0.6929
Daily Pivot Point S2 0.69
Daily Pivot Point S3 0.6861
Daily Pivot Point R1 0.6996
Daily Pivot Point R2 0.7035
Daily Pivot Point R3 0.7064

 

 

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