• NZD/USD bulls take a breather around monthly high, probes two-day uptrend.
  • Fears of firmer US GDP, hawkish Fed challenge Kiwi pair buyers.
  • Firmer sentiment and downbeat US data offered a positive start to the key week.
  • US Consumer Confidence for July will decorate the calendar; risk catalysts are the key.

NZD/USD fades upside momentum as it takes rounds to 0.6260 during Tuesday’s Asian session. In doing so, the Kiwi pair remains near the monthly high flashed on Friday but snapped the two-day uptrend as traders await the key data/events amid a sluggish session.

The quote witnessed a softer start to the week comprising the Federal Open Market Committee (FOMC) meeting amid a light calendar and mixed concerns over the US economic conditions.

That said, Chicago Fed National Activity Index reprinted -0.19 in June versus a -0.03 forecast. Further, Dallas Fed Manufacturing Index for July slumped to the lowest levels since mid-2020 to -22.6 versus -12.5 expected and -17.7 prior.

Even so, two US Treasury officials, Ben Harris, Treasury Assistant Secretary for Economic Policy and Neil Mehrotra, Deputy Assistant Secretary for Macroeconomics, raised hopes for a firmer US Gross Domestic Product (GDP). The officials wrote, per Reuters, that gross domestic income (GDI), which measures aggregate income -- wages, business profits, rental and interest income -- continued to rise in the first quarter at a 1.8% annual pace while GDP fell.

Previously, US Treasury Secretary Janet Yellen mentioned fears of the US recession, saying, “A second quarter GDP contraction would not signal recession because of underlying job market strength, demand and other indicators of economic health.”

It’s worth noting that the inversion between the 10-year and the 2-year US Treasury yields and the recently high inflation expectations per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data highlight fears of recession and the Fed’s aggression.

Against this backdrop, Wall Street managed to close mixed, with Nasdaq posting mild losses versus the softer gains of the DJI30 and S&P 500. However, the US 10-year Treasury yields snapped a three-day downtrend and rose nearly 1.75% while regaining the 2.81% mark of late. It should be noted that the S&P 500 Futures dropped 0.30% intraday by the press time.

Moving on, US CB Consumer Confidence for July, prior 98.7, appears to be the key for the pair traders to watch for the short-term directions. However, major attention will be given to the pre-Fed chatters, and growth-related talks will be crucial to watch for clear directions. Additionally important will be the US New Home Sales for June, Richmond Fed Manufacturing Index for July and House Price Index data for May.

Technical analysis

NZD/USD remains sidelined between the 21-DMA and the 50-DMA, respectively, around 0.6195 and 0.6315.

Additional important levels

Overview
Today last price 0.6263
Today Daily Change -0.0004
Today Daily Change % -0.06%
Today daily open 0.6267
 
Trends
Daily SMA20 0.6194
Daily SMA50 0.6313
Daily SMA100 0.6526
Daily SMA200 0.6686
 
Levels
Previous Daily High 0.6305
Previous Daily Low 0.6211
Previous Weekly High 0.6305
Previous Weekly Low 0.6141
Previous Monthly High 0.6576
Previous Monthly Low 0.6197
Daily Fibonacci 38.2% 0.6269
Daily Fibonacci 61.8% 0.6247
Daily Pivot Point S1 0.6217
Daily Pivot Point S2 0.6167
Daily Pivot Point S3 0.6123
Daily Pivot Point R1 0.6311
Daily Pivot Point R2 0.6355
Daily Pivot Point R3 0.6405

 

 

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