NZD/USD hangs near weekly low, 0.5900 remains in sight ahead of Fed Chair Powell’s speech

NZD/USD draws some support from subdued USD demand, through lack follow-through.
A positive risk tone, along with a further decline in the US bond yields, undermines the USD.
The uncertainty over the Fed’s rate hike path holds back traders from placing directional bets.
Investors also seem reluctant ahead of Fed Chair Jerome Powell’s speech later this Wednesday.

Haresh Menghani FXStreet

The NZD/USD pair struggles to capitalize on the overnight late rebound from the 0.5910 area, or the weekly low and remains on the defensive through the Asian session on Wednesday. Spot prices currently trade around the 0.5930 region and seem vulnerable to extending this week's rejection slide from the 0.6000 psychological mark, or the highest level since October 12 touched on Monday.

The US Dollar (USD) takes a brief pause and consolidates its strong recovery gains registered over the past two days, which, in turn, is seen lending some support to the NZD/USD pair. Declining US Treasury bond yields, along with a generally positive risk tone, keep a lid on the safe-haven buck. Traders, however, seem reluctant to place aggressive bets and prefer to wait for fresh cues about the Federal Reserve's (Fed) future rate-hike path.

Investors seem convinced that the US central bank is nearing the end of its rate-hiking cycle and the bets were reaffirmed by the softer US monthly employment details released last Friday. That said, a slew of Fed officials this week acknowledged the US economic resilience and left the door open for additional rate hikes. Hence, Fed Chair Jerome Powell's speech will be looked for hints about the next policy move, which will drive the USD demand.

In the meantime, growing concerns about the worsening economic conditions in China – further fueled by rather unimpressive Chinese Trade Balance data on Tuesday – might continue to act as a headwind for antipodean currencies, including the Kiwi. Apart from this, expectations that the Reserve Bank of New Zealand (RBNZ) will keep its policy rate unchanged in November suggests that the path of least resistance for the NZD/USD pair is to the downside.

Technical levels to watch

NZD/USD

Overview
Today last price	0.5926
Today Daily Change	-0.0009
Today Daily Change %	-0.15
Today daily open	0.5935

Trends
Daily SMA20	0.5881
Daily SMA50	0.5915
Daily SMA100	0.6015
Daily SMA200	0.6114

Levels
Previous Daily High	0.5976
Previous Daily Low	0.5911
Previous Weekly High	0.6005
Previous Weekly Low	0.5788
Previous Monthly High	0.6056
Previous Monthly Low	0.5772
Daily Fibonacci 38.2%	0.5936
Daily Fibonacci 61.8%	0.5951
Daily Pivot Point S1	0.5905
Daily Pivot Point S2	0.5876
Daily Pivot Point S3	0.584
Daily Pivot Point R1	0.597
Daily Pivot Point R2	0.6006
Daily Pivot Point R3	0.6035

Author

Haresh Menghani

FXStreet

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

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