- NZD/USD: rallies like a ball under water, targeting 0.70 the figure with eyes towards 0.7030 resistance.
- NZD/USD: strength could be an opportunity to sell into.
NZD/USD has continued in its recovery from the 0.6882 lows, (0.6883 was 12-day low in Asia on the back of NZD/JPY selling), and has reached a high of 0.6998 on comeback Wednesday where risk appetite bounced back following a calmer environment surrounding Italian politics where nerves have lightened up.
During the European session, the PM-designate, Carlo Cottarelli, former IMF economist who was chosen after the failure of populist parties to get their cabinet approved, spoke out explaining that discussions to form an interim government have been moving ahead. This tempered down the bears and gave rise to a reversal in yields. Italy's, Spain's and Portugal's yields dropped and the spread between DE and BTP narrowed.
"The better tone to risk saw safe-haven demand for Treasuries ease and that is likely to flow through to some steepening pressure for our curve on the open, although with our long-end likely to outperform,"
-analysts at ANZ explained.
In the 10 year yields have seen a reversal of yesterday's flight to safety as follows:
- Spain 1.551%, down 7 bps
- Italy 2.949%, down 21 bps
- Portugal 2.067%, -12.7 bps
- Germany 0.373%, up 11. 4 bps
- France 0.704%, up 4.8 bps
- UK 1.254%, up 5. 7 bps
At the same time, US Q1 GDP second reading q/q annualized arrived as +2.2% vs +2.3% expected and the ADP US May employment was also a miss at +178K vs the +190K expected. For the day ahead, NY ANZ Business Outlook and Chinese PMI data along with capital expenditure and credit data in Australia are data risks.
"The kiwi displayed its ‘beach ball underwater’ properties overnight as the sub-0.69 level again proved too much of an ask. It tested 0.70 overnight and it looks like it could face further tests in the near-term, although our overall views are unchanged and any strength is something we’d see as an opportunity to sell into,"
- the at analysts at ANZ argued.
NZD/USD levels
Key support is located at 0.6880 while resistance is located at 0.7000, NZD/USD remains in the vicinity of the 200-month moving average resistance at 0.6980 and weekly technicals remain bearish. RSIs are biased to the downside although turning slightly higher with this strong short squeeze through the21-D SMA at 0.6946. A break of the 200-M SMA opens 0.7000 and then 0.7030, Early 2017 Dec tops. Below 0.6850, 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.