NZD/USD falls back towards 0.5800 as Greenback steps up

The NZD/USD is falling back into near-term congestion as markets pick up the US Dollar.
Kiwi traders keeping a look out for Tuesday's NZ labor figures.
Broad markets are looking to Fed's Wednesday showing.

Joshua Gibson FXStreet

The NZD/USD is falling back towards 0.5800 as investors broadly turn back into the US Dollar (USD) ahead of the Federal Reserve's (Fed) upcoming rate call on Wednesday. Before that, late Tuesday sees the latest labor and unemployment figures for New Zealand, followed by a speech from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr.

Broad-market sentiment has turned moderately risk-off, sending the USD higher across the board with the Dollar Index (DXY) gaining around a percent from Tuesday's early low, and the Kiwi is getting pushed back into the 0.5800 handle, keeping the NZD/USD pinned in familiar downside with the pair trading into eleven-month lows.

Markets have priced in a hold on Fed rates this Wednesday, but firm US growth figures and inflation that refuses to abate quick enough are pushing up odds of one more rate hike from the Fed in December to close out the year.

New Zealand: More robust than expected labour market to benefit the NZD – Commerzbank

New Zealand's Q3 Unemployment Rate is expected to tick up from 3.6% to 3.9%, with the 3rd quarter's Employment Change expected to climb 0.4%, compared to Q2's 1.0%.

With NZ labor market data expected to decline slightly, ongoing market concerns about China's wobbly economy, and still-high inflation plaguing the New Zealand domestic economy, the Kiwi isn't expected to find much to rally about.

However, a better-than-expected reading for economic activity figures could see the RBNZ given enough room to further tighten monetary policy, which could bolster the NZD.

NZD/USD Technical Outlook

With the Kiwi trading back into 0.8500, downside technical support is thinning quickly, and the levels to watch will be last week's downswing into 0.5772, and a break beyond this level will see the NZD/USD making a run for last October's trading territory, near 0.5700.

Technical resistance is piling up above current bids, with the 50-day Simple Moving AVerage (SMA) pushing down into the 0.5900 major level, a confluence resistance level. Further beyond that, October's swing high into 0.6050 represents the last major ceiling for any bullish recoveries for the NZD/USD.

NZD/USD Daily Chart

NZD/USD Technical Levels

NZD/USD

Overview
Today last price	0.5818
Today Daily Change	-0.0025
Today Daily Change %	-0.43
Today daily open	0.5843

Trends
Daily SMA20	0.59
Daily SMA50	0.5918
Daily SMA100	0.6032
Daily SMA200	0.6131

Levels
Previous Daily High	0.5846
Previous Daily Low	0.5805
Previous Weekly High	0.5874
Previous Weekly Low	0.5772
Previous Monthly High	0.605
Previous Monthly Low	0.5847
Daily Fibonacci 38.2%	0.583
Daily Fibonacci 61.8%	0.582
Daily Pivot Point S1	0.5816
Daily Pivot Point S2	0.579
Daily Pivot Point S3	0.5775
Daily Pivot Point R1	0.5858
Daily Pivot Point R2	0.5873
Daily Pivot Point R3	0.5899

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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