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NZD/USD rises above 0.6300 on an upbeat market mood and a soft US dollar

  • The NZD/USD erased early week losses and finished the week flat.
  • On Friday, recession fears abated, but growing risks remain skewed to the downside.
  • St. Louis Fed’s Bullard commented that the US economy is fine and that recession worries are exaggerated.

The New Zealand dollar recorded solid gains vs. the greenback, snapping two days of consecutive losses, recovering from daily lows near 0.6266, piercing through the 0.6300 figure, and ending near the daily highs at around 0.6327. At 0.6312, the NZD/USD reflects Friday’s upbeat market mood, which underpinned risk-sensitive currencies in the FX space.

Upbeat sentiment and a weaker greenback, a tailwind for the NZD/USD

Risk appetite increased in the session as witnessed by Wall Street finishing with robust gains after plunging to bear market levels, meaning losses of 20% or more from all-time-highs. US recession fears abated on US economic data, showing that consumer inflation expectations lowered from a 14-year high. Nevertheless, Thursday’s US S&P Global PMIs printed that the economy is slowing down, coupled with inflation expectations taming, which denotes the Fed could keep hiking but not at a faster pace.

During the North American session, the St. Louis Fed President James Bullard said US recession worries are overblown and commented that the US would be fine. He added that tightening policy will slow down the economy to a trend pace of growth and expects the need to move the FFR near 3.50%.

Late in the day, San Francisco Fed President Mary Daly said the Fed doesn’t need to think about the endpoint of the balance sheet yet, and added that the central bank would communicate regarding that. Daly’s said that she does not see a recession.

NZD/USD traders should be aware of New Zealand’s holiday, suggesting that no economic data is available. Meanwhile, the US economic docket featured the UoM Consumer Sentiment on its final reading for June, which plunged to 50. US New Home Sales rose 10.7% in May to 0.696 million and beat expectations of 0.588 million

In the week ahead, the New Zealand economic docket will feature ANZ Business Confidence, ANZ Consumer Confidence, and Building Permits. On the US front, the calendar will unveil Durable Goods Orders, CB Consumer Confidence, Gross Domestic Product, and the Fed’s favorite gauge of inflation, the Personal Consumption Expenditure (PCE) for May.

NZD/USD Key Technical Levels

 

Overview
Today last price0.6312
Today Daily Change0.0049
Today Daily Change %0.78
Today daily open0.6278
 
Trends
Daily SMA200.6401
Daily SMA500.6456
Daily SMA1000.6631
Daily SMA2000.6768
 
Levels
Previous Daily High0.6311
Previous Daily Low0.6247
Previous Weekly High0.6396
Previous Weekly Low0.6197
Previous Monthly High0.6569
Previous Monthly Low0.6217
Daily Fibonacci 38.2%0.6287
Daily Fibonacci 61.8%0.6272
Daily Pivot Point S10.6247
Daily Pivot Point S20.6215
Daily Pivot Point S30.6183
Daily Pivot Point R10.631
Daily Pivot Point R20.6342
Daily Pivot Point R30.6373

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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