|

NZD/USD recovers after soft PCE data from the US

  • NZD/USD cleared part of it previous day’s losses and climbed to 0.6130, 0.90% up on the day.
  • Core PCE came in at 4.6% YoY vs. the 4.7% expected in May.
  • US bond yields retreated, weakening the US Dollar.

On Friday, following the release of soft Personal Consumption Expenditures (PCE) data from the US, the NZD/USD pair staged a recovery, erasing a portion of its previous day's losses. The pair advanced to 0.6120, marking an increase of 0.80% for the day. Following the data, US bond yields retreated, weakening the US Dollar, but remained in positive territory.

US reported soft PCE figures.

On Friday, the US Bureau of Economic Analysis reported that the Core PCE, the Federal Reserve’s (Fed) preferred gauge of inflation in the US, slightly decelerated in May. The figure declined to 4.6% YoY from its previous 4.7% reading, failing to meet the expectations of 4.7% and tallying a 0.3% MoM increase vs the 0.4% expected.

In response US bond yields retreated from daily highs as investors seemed to be betting on a less aggressive Fed. In that sense, the 2-year Bond yield peaked at 4.93%, its highest level since March 9, retreating to 4.85%, while the 5 and 10-year rates fell to 4.13% and 3.83%.

However, more evidence of inflation deceleration must be seen for the Fed to pivot from its hawkish stance. As for now, according to the CME FedWatch tool market is 86% sure of a 25 basis points (bps) hike on July 26 and still trying to figure out when the second hike Jerome Powell hinted will come.

NZD/USD Levels to watch

According to the daily chart, the technical outlook for the NZD/USD got better as the Relative Strength (RSI) and Moving Average Convergence Divergence (MACD) gained traction in negative territory. In addition, traders should eye the convergence of the 200 and 20-day Simple Moving Averages (SMA). Moreover, traders should eye the 200, 100 and 20-day Simple Moving Averages (SMA) convergence towards the 0.6140-0.6200 area as they seem to be about to perform a bearish cross. 

On the downside, support levels to watch align at 0.6100, 0.6050 and at 0.6030 (strong support seen at the beginning of June).

NZD/USD Daily chart

.

NZD/USD

Overview
Today last price0.6129
Today Daily Change0.0059
Today Daily Change %0.97
Today daily open0.607
 
Trends
Daily SMA200.6138
Daily SMA500.6167
Daily SMA1000.6197
Daily SMA2000.616
 
Levels
Previous Daily High0.6112
Previous Daily Low0.605
Previous Weekly High0.6237
Previous Weekly Low0.6116
Previous Monthly High0.6385
Previous Monthly Low0.5985
Daily Fibonacci 38.2%0.6074
Daily Fibonacci 61.8%0.6088
Daily Pivot Point S10.6043
Daily Pivot Point S20.6015
Daily Pivot Point S30.5981
Daily Pivot Point R10.6105
Daily Pivot Point R20.6139
Daily Pivot Point R30.6167

Author

Patricio Martín

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

More from Patricio Martín
Share:

Editor's Picks

GBP/USD retreats further, clinches three-day lows

The British Pound comes under extra selling pressure at the beginning of the week, dragging GBP/USD to fresh three-day troughs near 1.3350. Cable’s steady drop follows the improved tone in the Greenback as effervescence in the Middle East remains everything but abated.

EUR/USD remains offered below 1.1400

EUR/USD builds on Friday’s pullback and revisits the 1.1380 region, or multi-day lows, in quite a negative start to the week. The pair’s extra losses come in response to the marked bounce in the US Dollar, supported at the same time by unabated tensions in the Middle East. In the meantime, investors continue to gear up for the upcoming US CPI data and the semiannual testimony by Chair Warsh.

Gold breaches below $4,000, tests monthly lows

Gold remains under marked downside pressure on Monday, breaking below the key $4,000 hurdle per troy ounce to trade closer to monthly troughs. The precious metal’s retracement comes in response to the extra recovery in the US Dollar and rising concerns surrounding the US-Iran conflict.

Bitcoin vs Gold Outlook: Sell-off fears intensify as Middle East tensions escalate
Bitcoin (BTC) and Gold (XAU) remain under pressure at the time of writing on Monday. The Crypto King has slipped below $63,000, while XAU approaches the psychologically important $4,000 support level. The drawdowns indicate that risk-averse sentiment is dominant as investors continue to assess the impact of renewed geopolitical tensions in the Middle East.
The week ahead: Geopolitical risks rise, Warsh speaks to congress and earnings season gathers pace

It’s a shaky start to the week for financial markets. The oil price has risen by nearly 4% and Brent crude is trading above $79 per barrel. This comes after more attacks between the US and Iran in the Gulf, and statements from the Iranian regime that it has closed the Strait of Hormuz.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.