NZD/USD: Sell-off stalls ahead of the Fed and NZ GDP


  • NZD/USD has retraced nearly 25% of the recent drop.
  • Recovery could be short-lived if the Fed fails to match dovish expectations.
  • New Zealand's growth rate likely ticked higher in the first quarter.

The sell-off in the NZD/USD has stalled ahead of the Federal Reserve's closely-watched policy decision later in the day.

The currency pair rose 0.52% on Tuesday, retracing nearly 25% of the drop from 0.6681 to0.6487 seen over the preceding seven trading days.

The NZD likely found takers on reports stating that  China and the United States are rekindling trade talks ahead of next week's meeting between Presidents Donald Trump and Xi Jinping.

The recovery may gather pace later today if the US Federal Reserve exceeds dovish expectations. Currently, the market is fully priced in for two 25 basis point rate cuts by the end of the December FOMC meeting and a 50% chance of a third. If the Fed fails to meet market expectations, the NZD/USD will likely fall back to recent lows below 0.65.

Post-Fed, the focus would shift to New Zealand data, due at 22:45 GMT, which is expected to show the annualized growth rate ticked higher to 2.4% in the first three months of 2019 from 2.3% seen in the final quarter of 2018.

A weaker-than-expected GDP will likely reinforce dovish RBNZ (Reserve Bank of New Zealand) expectations and hurt the NZD. As of writing, the pair is trading largely unchanged on the day near 0.6530.

Technical Levels

NZD/USD

Overview
Today last price 0.6528
Today Daily Change -0.0001
Today Daily Change % -0.02
Today daily open 0.6529
 
Trends
Daily SMA20 0.6559
Daily SMA50 0.6605
Daily SMA100 0.6715
Daily SMA200 0.671
Levels
Previous Daily High 0.6538
Previous Daily Low 0.649
Previous Weekly High 0.6666
Previous Weekly Low 0.6487
Previous Monthly High 0.6684
Previous Monthly Low 0.6481
Daily Fibonacci 38.2% 0.652
Daily Fibonacci 61.8% 0.6508
Daily Pivot Point S1 0.65
Daily Pivot Point S2 0.6471
Daily Pivot Point S3 0.6452
Daily Pivot Point R1 0.6548
Daily Pivot Point R2 0.6567
Daily Pivot Point R3 0.6596

 

 

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