NZD/USD falls to negative territory after Fed decisions keeps the 20-day SMA

The NZD/USD reversed its course and fell towards 0.5930, after reaching a high of 0.5985.
The US Dollar strengthened on the back of rising US yields after the Fed’s hawkish pause.
The Fed kept rates at 5.25-5.50% as expected.
The bank reduced projections of 100 bps of rate cuts in 2024 to 50 bps.

Patricio Martín FXStreet

In Tuesday’s session, the NZD/USD saw volatility trading in the 0.5924 - 0.5985 and clearing all of its daily gains. The US Dollar recovered as the Federal Reserve (Fed) hinted at one more hike and pushed back rate cuts in 2024.

Investors assess the Federal Reserve's decision

The US Federal Reserve, as expected, didn't hike interest rates but surprised with a somewhat more hawkish stance, causing the market to fly to safety. They hinted at a single rate hike of 25 basis points later this year as the Summary of Economic Projection’s (SEM) so-called dot plots median rate remained at 5.6% and reduced future rate cut projections for 2024 from 100 to 50 basis points. This shift led markets to anticipate a rate cut not before September 2024.

During the press conference, Chair Powell emphasised their priority is a smooth economic transition and mentioned the importance of price stability. He then added that the decisions will be decided meeting by meeting, relying solely on incoming data. However, he did not hesitate to comment that the Fed is prepared to hike rates further if necessary.

After the press conference, the short-term US yields stand at multi-year highs, with the 2,5 and 10-year rates rising to 5.15%, 4.55% and 4.36%, their highest in more than 10-year, which seems to make the USD gain interest. In line with that, the DXY index rose back above 105.00 and cleared daily losses.

NZD/USD Levels to watch

Despite the drop, the technical analysis of the daily chart suggests a neutral to bullish stance for NZD/USD as the bulls work on recovering their ground. Having turned flat in negative territory, the Relative Strength Index (RSI) suggests a potential market equilibrium with balanced selling and buying pressure,while the Moving Average Convergence (MACD) histogram presents larger green bars. In addition, the pair is above the 20-day Simple Moving Average (SMA), but below the 100 and 200-day SMAs, indicating that the bulls aren't done yet and that the outlook is still positive for the short term.

Support levels: 0.5920 (20-day SMA), 0.5890, 0.5860.

Resistance levels: 0.6000,0.6030, 0.6050.

NZD/USD Daily chart

NZD/USD

Overview
Today last price	0.5926
Today Daily Change	-0.0010
Today Daily Change %	-0.17
Today daily open	0.5936

Trends
Daily SMA20	0.5921
Daily SMA50	0.6043
Daily SMA100	0.6106
Daily SMA200	0.6195

Levels
Previous Daily High	0.5948
Previous Daily Low	0.5904
Previous Weekly High	0.5945
Previous Weekly Low	0.588
Previous Monthly High	0.6219
Previous Monthly Low	0.5885
Daily Fibonacci 38.2%	0.5931
Daily Fibonacci 61.8%	0.5921
Daily Pivot Point S1	0.5911
Daily Pivot Point S2	0.5886
Daily Pivot Point S3	0.5868
Daily Pivot Point R1	0.5955
Daily Pivot Point R2	0.5973
Daily Pivot Point R3	0.5998

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

GBP/USD clings to multi-day peaks below 1.3500

GBP/USD trades with marked gains on Friday, now giving away some gains following an earlier surpass of the key 1.3500 yardstick. Indeed, Cable gathers fresh steam amid the strong offered stance in the Greenback, all after US NFP badly missed expectations in July.

EUR/USD: Post-NFP bounce falters around 1.1580

EUR/USD reverses Thursday’s decline and trades with solid gains in the 1.1560 region, or two-month peaks, on Friday. The pair’s firm performance comes in a context of a sharp correction in the US Dollar as investors continue to assess disheartening US NFP readings.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

XRP Price Forecast: XRP nears critical $1.00 support

Ripple (XRP) remains pressured on Friday, trading around $1.03 at the time of writing. The token appears to hold this current level as support but lacks a catalyst to sustain a knee-jerk rebound toward the next key resistance at $1.10.

Is Gold about to enter its biggest bull run since 2020?

Gold has stormed back into the spotlight and its next move could leave late buyers chasing. On August 5, the yellow metal surged almost 7% – roughly $174 – to close near $4,308 an ounce, posting one of its biggest daily advances in recent history. A weaker U.S dollar, falling Treasury yields, changing Federal Reserve expectations and renewed safe-haven demand all struck at once.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.