NZD/USD seems vulnerable near one-week low, around 0.6770 amid stronger USD/risk-off

A combination of factors dragged NZD/USD away from a multi-week high touched last Thursday.
Surging US bond yields continued acting as a tailwind for the USD and exerted some pressure.
The risk-off impulse further contributed to driving flows away from the perceived riskier kiwi.

Haresh Menghani FXStreet

The NZD/USD pair maintained its offered tone through the mid-European session and was last seen trading near a one-week low, around the 0.6770 area.

The pair witnessed fresh selling on Tuesday and extended last week's retracement slide from the vicinity of the 0.6900 mark, or the highest level since November 24. A combination of factors assisted the US dollar to recover further from an over two-month low touched in reaction to the devastating US retail sales report on Friday. This, in turn, was seen as a key factor exerting pressure on the NZD/USD pair.

Expectations for an eventual Fed lift-off in March – amid concerns over stubbornly high inflation – pushed the yield on the benchmark 10-year US government bond to the highest level since January 2020. Moreover, the US 2-year notes, which are highly sensitive to rate hike expectations, surged past the 1.0% mark for the first time since February 2020 and continued underpinning the greenback.

Meanwhile, an extended sell-off in the US bond markets took its toll on the global risk sentiment and triggered a steep decline in the equity markets. This was seen as another factor that benefitted the greenback's relative safe-haven status and drove flows away from the perceived riskier kiwi. The downtick could also be attributed to some technical selling on a sustained break below the 0.6800 mark.

Market participants now look forward to the US economic docket, featuring the release of the Empire State Manufacturing Index for some impetus during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will influence the USD price dynamics and produce some meaningful trading opportunities around the NZD/USD pair.

Technical levels to watch

NZD/USD

Overview
Today last price	0.6772
Today Daily Change	-0.0022
Today Daily Change %	-0.32
Today daily open	0.6794

Trends
Daily SMA20	0.6807
Daily SMA50	0.6848
Daily SMA100	0.6957
Daily SMA200	0.7022

Levels
Previous Daily High	0.6819
Previous Daily Low	0.6787
Previous Weekly High	0.6891
Previous Weekly Low	0.6736
Previous Monthly High	0.6891
Previous Monthly Low	0.6701
Daily Fibonacci 38.2%	0.6799
Daily Fibonacci 61.8%	0.6807
Daily Pivot Point S1	0.6781
Daily Pivot Point S2	0.6768
Daily Pivot Point S3	0.6749
Daily Pivot Point R1	0.6813
Daily Pivot Point R2	0.6832
Daily Pivot Point R3	0.6845

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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