NZD/USD finds support at 0.6300 and rebounds toward 0.6350
- US Dollar post mix results across the board on Tuesday.
- NZD and AUD are among worst performers hit by BoJ.
- NZD/USD faces next resistance at 0.6365, key support at 0.6300.
The NZD/USD dropped to test the 0.6300 area after the beginning of the American session. Buyers again appear and pushed the pair back to the 0.6340 area.
Risk sentiment improves, helping Kiwi
Equity prices in the US turned positive amid an improvement in market sentiment. The Dow Jones is up by 0.19% and the Nasdaq by 0.03%. Commodity prices are trading near daily highs.
Treasury bond yields are up following the Bank of Japan (BoJ) policy announcement. Early on Tuesday, the BoJ shocked markets by easing its bond-yield controls. This was seen as a potential shift. The US 10-year reached 3.70% while the 2-year rose to 4.30%. Higher yields are giving some support to the US Dollar. The DXY is falling by 0.75%, mostly due to the USD/JPY’s slide of more than 3%. The Kiwi and the Aussie are the worst performers among G10 currencies.
US economic data released on Tuesday came in below expectations. Building Permits tumbled 11.2% to 1.342 million (annual rate) below the 1.470 million of market consensus. Housing starts dropped less than expected to 1.427 million.
Technical outlook
The NZD/USD is rebounding after being able to hold above 0.6300. A break lower would open the doors to more losses. The next relevant support is seen at 0.6250. On the upside, the pair faces a critical resistance at 0.6365 (horizontal level and the 20-Simple Moving Average in 4-hour chart). A break higher could lead to a test of 0.6400.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
