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NZD/USD hangs near daily low, just above mid-0.5600s ahead of US GDP/Jobless Claims

  • NZD/USD meets with a fresh supply on Thursday and is pressured by a combination of factors.
  • Fed rate hike bets trigger a fresh leg up in the US bond yields and revive the USD demand.
  • The risk-off impulse also underpins the safe-haven buck and weighs on the risk-sensitive kiwi.

The NZD/USD pair comes under renewed selling pressure on Thursday and reverses a part of the overnight bounce from its lowest level since March 2020. The pair maintains its offered tone through the early part of the European session and is currently trading near the daily low, just above mid-0.5600s.

Following the previous day's dramatic turnaround from a new 20-year peak, the US dollar regains strong positive traction and turns out to be a key factor exerting downward pressure on the NZD/USD pair. A goodish pickup in the US Treasury bond yields, bolstered by expectations for faster rate hikes by the Fed, acts as a tailwind for the greenback.

Investors seem convinced that the Fed will stick to its aggressive policy tightening path to combat stubbornly high inflation. The bets were reaffirmed by the recent hawkish comments by a slew of FOMC members. This, along with a fresh wave of the global risk-aversion trade, underpins the safe-haven buck and weighs on the risk-sensitive kiwi.

The market sentiment remains fragile amid growing worries that rapidly rising borrowing costs will lead to a deeper global economic downturn. Apart from this, the risk of a further escalation in the Russia-Ukraine conflict takes its toll on the global risk sentiment, which is evident from a sea of red across the global equity markets.

Market participants now look forward to the US economic docket, featuring the release of the final Q2 GDP report and the usual Weekly Initial Jobless Claims data. This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand and produce some trading opportunities around the NZD/USD pair.

Technical levels to watch

NZD/USD

Overview
Today last price0.5669
Today Daily Change-0.0061
Today Daily Change %-1.06
Today daily open0.573
 
Trends
Daily SMA200.595
Daily SMA500.6137
Daily SMA1000.6225
Daily SMA2000.6485
 
Levels
Previous Daily High0.5734
Previous Daily Low0.5565
Previous Weekly High0.6003
Previous Weekly Low0.573
Previous Monthly High0.647
Previous Monthly Low0.6101
Daily Fibonacci 38.2%0.5669
Daily Fibonacci 61.8%0.563
Daily Pivot Point S10.5619
Daily Pivot Point S20.5507
Daily Pivot Point S30.545
Daily Pivot Point R10.5788
Daily Pivot Point R20.5845
Daily Pivot Point R30.5957

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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