NZD/USD retreats further from one-month tops, slides to mid-0.7000s


  • NZD/USD witnessed an intraday pullback from one-month tops touched earlier this Monday.
  • Hawkish Fed expectations, rallying US bond yields helped revive demand for the greenback.
  • A softer risk tone further benefitted the USD’s safe-haven status and exerted some pressure.

The NZD/USD pair extended its corrective pullback from one-month tops and dropped to fresh daily lows, around mid-0.7000s during the early part of the European session.

The pair gained some positive traction on the first day of a new trading week and shot to the highest level since September 16 in reaction to a hotter-than-expected New Zealand CPI report. Bulls, however, struggled to capitalize on the move, or find acceptance above the 0.7100 mark amid a strong pickup in the US dollar demand.

The prospects for an early policy tightening by the Fed pushed the yield on the benchmark 10-year US government bond back above the 1.60% threshold on Monday. This, along with a generally softer risk tone, benefitted the greenback's relative safe-haven status and acted as a headwind for the perceived riskier kiwi.

The FOMC meeting minutes released last Wednesday reaffirmed that the Fed remains on track to begin rolling back its massive pandemic-era stimulus as soon as November. The markets have also started pricing in the possibility of a rate hike in 2022 amid worries that the recent rally in commodity prices will stoke inflation.

Meanwhile, fears about a faster than expected rise in inflation and a sharp deceleration in the Chinese economic growth fueled concerns about the return of stagflation. In fact, the world's second-largest economy recorded a modest 0.2% growth during the third quarter and the yearly rate fell to 4.9% from 7.9% previous.

From a technical perspective, the early uptick faltered near a confluence resistance comprising of the very important 200-day SMA and a downward sloping trend-line extending from YTD tops. With the latest leg down, the NZD/USD pair has now snapped three consecutive days of the winning streak, though the pullback lacked bearish conviction.

Hence, it will be prudent to wait for a strong follow-through selling before confirming that the NZD/USD pair has topped out in the near term and placing aggressive bearish bets. Market participants now look forward to the release of US Industrial Production data for some impetus later during the early North American session.

Technical levels to watch

NZD/USD

Overview
Today last price 0.7055
Today Daily Change -0.0011
Today Daily Change % -0.16
Today daily open 0.7066
 
Trends
Daily SMA20 0.6974
Daily SMA50 0.7004
Daily SMA100 0.7024
Daily SMA200 0.7102
 
Levels
Previous Daily High 0.7078
Previous Daily Low 0.7028
Previous Weekly High 0.7078
Previous Weekly Low 0.6912
Previous Monthly High 0.7171
Previous Monthly Low 0.6859
Daily Fibonacci 38.2% 0.7059
Daily Fibonacci 61.8% 0.7047
Daily Pivot Point S1 0.7037
Daily Pivot Point S2 0.7007
Daily Pivot Point S3 0.6987
Daily Pivot Point R1 0.7087
Daily Pivot Point R2 0.7107
Daily Pivot Point R3 0.7137

 

 

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

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.

EUR/USD News

GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.

GBP/USD News

Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures