• On Monday, the NZD/USD plunged to levels last seen on March 2020.
  • Risk aversion is the game’s name, due to increased recession jitters, alongside UK’s tax cuts, adding to inflationary pressures.
  • NZD/USD traders eye Durable Good Orders, New Home Sales, Consumer Confidence, and Fed Chief Jerome Powell.

On Monday, the NZD/USD plunged more than 1% or 107 pips, as risk aversion hit the markets, with global equities trading in the red, amidst growing concerns of a worldwide recession, following a week of 500 bps of tightening by central banks. Additionally, tax cuts in the UK added to the country’s inflationary pressures, despite the ongoing tightening cycle by the Bank of England (BoE). As the Asian Pacific session begins, the NZD/USD is trading at 0.5635, slightly down by 0.01%.

NZD/USD fell towards the 0.5420s on risk-off impulse

The lack of economic data kept investors leaning towards market sentiment and US dollar dynamics. Last week’s 75 bps by the Fed, and expectations of the Federal funds rate (FFR) to finish at around 4-4.4% levels, augmented appetite for the safe-haven US dollar. Consequently, US Treasury bond yields rose, with the short-end of the curve, namely 2s and 5s, breaching the 4% threshold, while the US 10-year T-bond yield climbed towards 3.93%.

In the meantime, the US Dollar Index refreshed two-decade highs at around 114.53, a headwind for the NZD/USD, which began trading on Monday at 0.5740 and reached a daily high of 0.5754 before plummeting toward the daily low at 0.5625.

Elsewhere, Fed officials crossed newswires on Monday. The Boston Fed President Susan Collins expressed that further tightening is needed to temper inflation and emphasized that the unemployment rate should rise to achieve the Fed goal. Echoing her comments was Cleveland’s Fed President Loretta Mester, alongside Atlanta’s Fed President Raphael Bostic

What to watch

On Tuesday, the US economic docket will feature Durable Goods Orders, Consumer Confidence, New Home Sales, and further Fed speaking, led by Chair Jerome Powell.

The New Zealand calendar is empty, leaving traders adrift to US dollar dynamics.

NZD/USD Key Technical Levels

NZD/USD

Overview
Today last price 0.5635
Today Daily Change -0.0102
Today Daily Change % -1.78
Today daily open 0.5742
 
Trends
Daily SMA20 0.6017
Daily SMA50 0.6169
Daily SMA100 0.6245
Daily SMA200 0.6501
 
Levels
Previous Daily High 0.5857
Previous Daily Low 0.573
Previous Weekly High 0.6003
Previous Weekly Low 0.573
Previous Monthly High 0.647
Previous Monthly Low 0.6101
Daily Fibonacci 38.2% 0.5779
Daily Fibonacci 61.8% 0.5808
Daily Pivot Point S1 0.5696
Daily Pivot Point S2 0.5649
Daily Pivot Point S3 0.5569
Daily Pivot Point R1 0.5823
Daily Pivot Point R2 0.5903
Daily Pivot Point R3 0.595

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD fades recovery moves above 0.6700 ahead of RBA Bulletin, Australia Trade Balance

AUD/USD fades recovery moves above 0.6700 ahead of RBA Bulletin, Australia Trade Balance

AUD/USD struggles to defend the latest bullish impulse around 0.6725-30, after bouncing off a one-week low the previous day, as traders await updates/data from Australia during early Thursday.

AUD/USD News

EUR/USD grinds higher past 1.0500 with eyes on ECB President Lagarde

EUR/USD grinds higher past 1.0500 with eyes on ECB President Lagarde

EUR/USD struggles to defend the previous day’s corrective bounce around 1.0510-15 during Thursday’s Asian session. In doing so, the major currency pair portrays the market’s inaction amid a light calendar and mixed sentiment.

EUR/USD News

Gold eyes further upside on downbeat United States Treasury bond yields

Gold eyes further upside on downbeat United States Treasury bond yields

Gold price seesaws around $1,785, after posting the biggest daily gains in a week, as buyers seek more clues to approach the five-month top marked earlier in the week. The yellow metal’s latest run-up could be linked to the downbeat performance of the United States Treasury bond yields.

Gold News

Binance’s US arm eliminating trading fees for ETH means this for Ethereum price

Binance’s US arm eliminating trading fees for ETH means this for Ethereum price

Binance has managed to cement itself in the crypto space as a leader over the last couple of weeks. Following FTX’s collapse, the world’s biggest cryptocurrency exchange has been attempting to regain its customers’ trust and confidence.

Read more

What happens after the Fed reaches the terminal rate

What happens after the Fed reaches the terminal rate

The discrepancy starts to show. What will the Fed do? For now, the Fed is raising rates to stave off inflation, and are expected to level out at around 5.0%. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures