NZD/USD remains on the defensive amid weaker risk tone, holds above 0.6400 mark


  • NZD/USD trades with modest losses on Thursday, though the downside remains cushioned.
  • Looming recession risks weigh on investors’ sentiment and undermine the risk-sensitive Kiwi.
  • Subdued USD price action lends some support to the major and helps limit any deeper losses.

The NZD/USD pair edges lower during the Asian session on Thursday and moves away from its highest level since June 2022, around the 0.6530 area touched the previous day. Spot prices, however, manage to hold above the 0.6400 mark, making it prudent to wait for strong follow-through selling before positioning for any further intraday downfall.

The weaker US macro data released on Wednesday adds to worries about a deeper global economic downturn and continues to weigh on investors' sentiment. This is evident from a softer tone around the equity markets and acts as a headwind for the risk-sensitive Kiwi, which reacts little to news that Prime Minister Jacinda Ardern will step down next month. That said, subdued US Dollar price action lends some support to the NZD/USD pair and helps limit the downside, at least for the time being.

A further decline in the US Treasury bond yields, amid firming expectations for a less aggressive policy tightening by the Fed, keeps the USD bulls on the defensive. In fact, the markets now seem convinced that the US central bank will soften its stance and have been pricing in a smaller 25 bps rate hike in February. The bets were reaffirmed by the US data, showing that retail sales in December fell by the most in a year and manufacturing output recorded its biggest drop in nearly two years.

That said, several FOMC members indicated on Wednesday that they will push on with more interest rate hikes even as inflation shows signs of easing and economic activity is slowing. Apart from this, looming recession risks should benefit the greenback's relative safe-haven status and exert some downward pressure on the NZD/USD pair. Traders now look to the US economic docket, featuring the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and housing market data.

This, along with speeches by Fed officials and the US bond yields, might influence the USD price dynamics later during the early North American session. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities around the NZD/USD pair. Nevertheless, the mixed fundamental backdrop warrants some caution before placing aggressive directional bets.

Technical levels to watch

NZD/USD

Overview
Today last price 0.6415
Today Daily Change -0.0014
Today Daily Change % -0.22
Today daily open 0.6429
 
Trends
Daily SMA20 0.6334
Daily SMA50 0.6296
Daily SMA100 0.6057
Daily SMA200 0.6204
 
Levels
Previous Daily High 0.6531
Previous Daily Low 0.637
Previous Weekly High 0.6418
Previous Weekly Low 0.6314
Previous Monthly High 0.6514
Previous Monthly Low 0.623
Daily Fibonacci 38.2% 0.6469
Daily Fibonacci 61.8% 0.6431
Daily Pivot Point S1 0.6356
Daily Pivot Point S2 0.6282
Daily Pivot Point S3 0.6194
Daily Pivot Point R1 0.6517
Daily Pivot Point R2 0.6604
Daily Pivot Point R3 0.6678

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays on the back foot and trades in negative territory below 1.0700 as the US Dollar benefits from upbeat data in the American session. S&P Global reported that the economic activity in the US private sector continued to expand at a robust pace in June.

EUR/USD News

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD remains under bearish pressure and trades at its lowest level since mid-May below 1.2650. The stronger-than-forecast Manufacturing and Services PMI data from the US helps the USD hold its ground and causes the pair to stretch lower.

GBP/USD News

Gold drops below $2,340 as US yields rebound

Gold drops below $2,340 as US yields rebound

Gold loses its traction and trades deep in the red below $2,340 in the second half of the day on Friday. The benchmark 10-year US Treasury bond yield pushes higher following the upbeat PMI data from the US, weighing on XAU/USD.

Gold News

Bitcoin retraces to crucial support

Bitcoin retraces to crucial support

Bitcoin price encounters resistance at weekly highs before retracing to seek support at a crucial level, while Ethereum and Ripple align closely with Bitcoin's movements, gearing up to surpass resistance barriers and embark on upward rallies.

Read more

Week ahead – US PCE inflation the highlight of a relatively light agenda

Week ahead – US PCE inflation the highlight of a relatively light agenda

Core PCE inflation to test bets of two Fed rate cuts in 2024. Yen awaits BoJ Summary of Opinions, Tokyo CPI. Canadian CPI data also enters the spotlight.

Read more

Forex MAJORS

Cryptocurrencies

Signatures