NZD/USD Price Forecast: Unconvinced buyers maintain the pair afloat

A broadly weaker US Dollar helped NZD/USD to peak at 0.6317 on Tuesday but finished the day in the red at around 0.6245. Commodity-linked currencies surged throughout the first half of the day amid a better market mood weighing on the greenback but managed to recover some ground ahead of the close.

The Canadian Dollar was the weakest, as oil prices turned sharply lower in the final hour of trading, followed by the NZD, which shed ground despite encouraging Chinese headlines. According to different news agencies, the country is moving further away from its zero-covid policy as the focus has gyrated towards economic growth. There were also headlines indicating that the local health system is stressed amid multiplying contagions, but it was not enough to overshadow the good mood.

US data released following the long weekend was generally discouraging. The US November Trade Balance posted a deficit of $83.3 billion, improving from the previous deficit of $98.8 billion. Wholesale Inventories for the same month were up 1%, worse than the 0.7% expected, while the October Housing Price Index remained pat. Finally, the December Dallas Fed Manufacturing Business Index contracted to -18.8 from -14.4 in the previous month.

NZD/USD Technical Outlook

The NZD/USD pair’s near-term outlook favors the downside, as in the 4-hour chart, the pair trades below a flat 20 SMA, while technical indicators head nowhere just below their midlines. The intraday low at 0.6230 provides immediate support, later followed by 0.6155. The mentioned 20 SMA currently stands at around 0.6270, the level to surpass to confirm further gains towards the 0.6340 price zone.