- NZD/USD pressured as Fed speakers play up the hawkish outlook following hot US CPI.
- NZD/USD bulls meet a wall of resistance and suffer heavy supply.
- The bears could be encouraged to move in for a test of critical support on the daily time frame.
NZD/USD traders were taken on a ride of volatility on Thursday as the markets positioned for macro inflationary pressures which flows made their way through every facet of the forex space. The commodity complex was bid on the inflation hedge play which initially supported the kiwi after the knee-jerk bid in the greenback before it was met with heavy supply again in midday trade.
At 0.6685 during the time of writing, NZD/USD is around flat on the day after travelling between a low of 0.6652 and a high of 0.6732 in the final hours of Wall Street's trade. The bird spiked lower after the Federal Reserve James Bullard spoke out over the hot US inflation data, commenting that the central bank could be considering meeting rate hikes. He has said that he favours a 50bp hike in March and 10bps by July.
''Volatility remains the order of the day. Higher US yields are battling things like higher commodity prices for attention; while rates have had less of an influence on FX of late, the knee-jerk reaction to higher US bond yields tends to be NZD-negative,'' analysts at ANZ Bank explained.
NZD/USD technical analysis
As per the prior analysis, whereby it ws noted:
The ''NZD/USD bulls are taking charge in a significant correction,'' that was moving ''in on old lows near 0.67 the figure and towards the neckline of the M-formation near 0.6733,'' the price reache dthe target on Thursday.
This resided between the 50% mean reversion and the 61.8% ratio as follows:
NZD/USD prior and live analysis
NZD/USD daily chart
The Doji candle, if followed by a bearish close on Friday, could set case for a downside continuation for next week's business:
NZD/USD weekly chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.