NZD/USD - Off 19-day low, is a corrective rally on the cards?

Off 19-day low, but holds below the 50-day MA.
Corrective rally likely due to bullish price RSI divergence on 1-hour chart.

Omkar Godbole FXStreet Contributor

The NZD/USD has recovered from the 19-day low of 0.7220 and could move above the 50-day moving average (MA) of 0.7245, given the relative strength index (RSI) on the 1-hour chart has begun to diverge in favor of the NZD bulls.

As of writing, the pair is trading at 0.7230. China NBS manufacturing PMI released earlier today showed the activity slowed more than expected to the weakest in over 1-1/2 years. Further, the service sector slowed to the lowest since October last year in February.

But the slowdown in the activity has been associated with disruptions caused by the Lunar New Year holidays, meaning the situation will likely normalize in the months ahead. Hence, the NZD has seen little or no action post-China data release.

Ahead in the day, the spot may see renewed selling pressure if the European equities respond negatively to Powell's positive comments on the US economy.

NZD/USD Technical Levels

A break above 0.7245 (50-day MA) would open up upside towards 0.7279 (5-day MA)and 0.73 (psychological level). On the other hand, a violation at 0.7220 (session low) would expose 0.7198 (Feb. 9 low) and 0.7176 (Feb. 8 low).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

GBP/USD grinds higher to 1.3650 as USD recovery falters

GBP/USD grinds higher to near 1.3650 in Tuesday's European session. The US Dollar recovery falters, despite US sanctions on Iran, as hopes for diplomatic efforts creep back amid reports that Pakistan is carrying an offer to Iran to halt the siege and lift sanctions under the Memorandum of Understanding.

EUR/USD recovers toward 1.1700 as USD loses traction

EUR/USD is recovering ground toward 1.1700 in European trading on Tuesday. The pair draws support as the US Dollar rebound loses traction amid fresh diplomacy hopes in the Middle East conflict. An upbeat German IFO Survey also aids Euro bulls.

Gold remains depressed below $4,650 on firmer USD, Fed risks, and Middle East tensions

Gold remains on the back foot below $4,650 through the first half of the European session. However, the lack of follow-through selling warrants caution before positioning for an extension of the intraday retracement slide from the $4,700 neighborhood, or the highest level since May 14, touched earlier this Tuesday. The US Dollar is seen building on its recovery from a three-month low as inflation risks stemming from volatile energy prices keep bets for at least one interest rate hike by the US Federal Reserve on the table.

Bitcoin's rally above $80,000 shows signs of overheating

Bitcoin extends gains, trading above $80,000 at the time of writing on Tuesday following its strongest weekly rise in more than three years. Institutional demand continues to support this rally, with spot Exchange Traded Funds recording positive inflows on Monday.

Iran and Fed outlook remain uncertain after Bessent’s comments and ahead of Jackson Hole

Asia Market Update: Directionless trading continues for a 2nd straight session; Iran and Fed outlook remain uncertain after Bessent’s comments and ahead of Jackson Hole; Oman’s Foreign Minister will visit Tehran to Tues, Pakistan commented on MOU.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.