- NZD/USD once again fails near the 0.6155-0.6160 supply zone amid renewed USD buying.
- The mixed technical setup warrants some caution before placing aggressive directional bets.
- Some follow-through selling below the multi-month low will pave the way for deeper losses.
The NZD/USD pair meets with a fresh supply on the first day of a new week and extends its steady intraday descent through the first half of the European session. Spot prices drop to the 0.6120 region in the last hour and erode a part of Friday's positive move despite hawkish remarks by Reserve Bank of New Zealand (RBNZ) officials.
Testifying before the Finance and Expenditure Committee on Monday, Governor Adrian Orr highlighted that inflation remains elevated, which is why the RBNZ has maintained the cash rate at 5.5%. Adding to this, RBNZ Deputy Governor (Financial Stability) Christian Hawkesby noted that house prices have stabilized over the last six months, and the system is equipped to handle high interest rates. This, however, does little to provide any meaningful impetus to the NZD/USD pair amid the emergence of some US Dollar (USD) buying, bolstered by expectations that the Federal Reserve (Fed) will keep interest rates higher for longer.
From a technical perspective, the downfall reaffirms a stiff horizontal barrier near the 0.6155-0.6160 region, which should now act as a key pivotal point. Given that oscillators on the daily chart have been struggling to gain any meaningful traction, it will be prudent to wait for a sustained breakout through the said hurdle before positioning for any further gains. The NZD/USD pair might then accelerate the positive move towards the 0.6200 round figure and climb further towards the 0.6225-0.6230 horizontal resistance. The momentum could extend further towards the 0.6250-0.6260 supply zone, which if cleared will negate any near-term negative bias.
On the flip side, the 0.6100 mark now seems to protect the immediate downside ahead of the very important 200-day Simple Moving Average (SMA), currently pegged near the 0.6085 region. This is followed by the 0.6040-0.6035 region, or a multi-month low touched this February. A convincing break below the latter will be seen as a fresh trigger for bearish traders and drag the NZD/USD pair further towards the 0.6000 psychological mark.
NZD/USD daily chart
Technical levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.