- NZD/USD back to the 0.7200 handle on stronger USD
- Last week’s long NZD/USD trade on upbeat China’s President comments has now been totally retraced.
The NZD/USD is trading at around 0.7206 down 0.88% on Friday.
The NZD/USD is falling for the fourth day in a row and has now tested its 100-period simple moving average on the daily time frame at 0.7213.
The recent drop down in the kiwi is mainly attributed to US dollar strength. US bond yields are spiking to multi-week highs, which in turns boosts the greenback as more investors turn to US bonds exacerbating the USD demand. The US Dollar Index (DXY) is currently trading at 90.26 which is a level not seen since early April.
Last week move higher in the kiwi close to the 0.7400 handle was mainly driven by enthusiasm on the back of the comments of the Chinese President. Xi Jinping said that he wanted to push for free trade and open up its economy to foreign investments. He also spoke about lowering tariffs on the auto industry. However, later on, the upbeat comments were denied by a Chinese official who said that China would still retaliate in a trade war environment. Since China is a top trading partner with New Zealand, any news that affects China also generally affects the NZD.
Earlier on Wednesday, the New Zealand inflation numbers for the first quarter of the year came in line with expectations. The kiwi had a 30-pip intraday boost up but quickly resumed its downtrend as the data had no strong deviation to the upside and the general sentiment had shifted to bearish for the kiwi.
NZD/USD 4-hour chart
Support is priced in at 0.7188 swing low and at 0.7153 cyclical low, while resistance is seen at 0.7244 swing low and 0.7350 swing high and at 0.7396 cyclical high.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price bulls keenly await US PCE Price Index on Friday before placing fresh bets
Gold price (XAU/USD) continues with its struggle to make it through the $2,200 mark on Thursday and oscillates in a narrow trading band through the early part of the European session.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
The other terminal rate: How far will policy rates be cut?
Recent communication by the Federal Reserve and the ECB has made it clear that the first cut in official interest rates is coming. Both central banks are saying the same but the ECB communication is more opaque than that of the Fed.