NZD/USD sold-off near 200-DMA, slides below 0.7100

USD pauses a 10-day sell-off.
Breaks below 0.7100.
Unperturbed by upbeat NZ GDT price index.

Dhwani Mehta FXStreet

The NZD/USD pair remains well offered below the 0.71 handle, as the bears extend the overnight correction from multi-month tops into Asia.

NZD/USD faces rejection just shy of 200-DMA of 0.7138

The Kiwi remains fell for the first time in eleven trading sessions, as the US dollar was offered some respite across the board, with markets resorting to cover their USD shorts ahead of the release of the FOMC Dec meeting minutes later on Wednesday.

However, it remains to be seen whether the spot extends its corrective slide into Europe, as upbeat Chinese Caixin manufacturing PMI as well as NZ GDT price index continue to keep the sentiment buoyed around the NZD.

The NZ GDT auction results showed a 2.2% increase in the latest fortnight versus a -3.9% decline seen at the last auction. Yesterday’s results revealed the last 5 of 6 auctions have seen prices fall.

More so, higher oil prices combined with risk-on moves seen in the Asian equities also help to keep the downside limited in the spot. Focus now shifts towards the US ISM manufacturing PMI release for fresh momentum on the USD price-action.

NZD/USD Technicals

The pair finds next resistances at 0.7138 (200-DMA), 0.7150 (psychological levels), 0.7172 (Oct 19 high). Meanwhile, the supports are located at 0.7063 (10-DMA), 0.7027 (100-DMA) and 0.7000 (key support).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold picks pace, flirts with $5,000

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.