• NZD/USD continues scaling higher on Friday and climbs to over a two-month high
  • The uncertainty over the next Fed rate hike keeps the USD bulls on the defensive.
  • A positive risk tone also seems to cap the USD and benefits the risk-sensitive kiwi.

The NZD/USD pair prolongs this week's strong move up and gains traction for the fifth successive day on Friday. The momentum lifts spot prices to over a two-month high, around the 0.6465-0.6470 region during the early European session.

The pair is supported by a weaker US dollar which struggles to capitalize on the overnight bounce from its lowest level since late June and is stuck in a range on the last day of the week. The uncertainty over the size of the next rate hike by the US central bank seems to act as a headwind for the greenback.

US CPI report on Wednesday revealed that consumer prices were unchanged in July. Adding to this, the US Producer Price Index unexpectedly fell in July for the first time in two years, suggesting that inflation may have peaked. This brought down future rate hike expectations. 

Yet recent hawkish remarks by several Fed officials indicated that actually the Fed would stick to its policy tightening path. In fact, San Francisco Fed President Mary Daly, St. Louis Fed President James Bullard, Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari have backed the case for further interest rate hikes.

Markets are still pricing in at least a 50 bps Fed rate hike at the September meeting. This remains supportive of elevated US Treasury bond yields and offers some support to the USD. That said, signs of easing inflationary pressures have forced investors to trim bets for a 75 Fed rate hike at the September policy meeting.

The latest leg higher in the kiwi has managed to find acceptance above the 100-day SMA. This could be seen as a fresh trigger for bulls and supports prospects for a further near-term appreciation. Nevertheless, the NZD/USD pair remains on track to end the week with strong gains and records its highest weekly close since late May.

Market participants now look forward to the release of the Michigan US Consumer Sentiment Index, due later during the early North American session. Apart from this, the US bond yields would drive the USD demand. Traders would further take cues from the broader risk sentiment to grab short-term opportunities around the NZD/USD pair.

Technical levels to watch

NZD/USD

Overview
Today last price 0.646
Today Daily Change 0.0024
Today Daily Change % 0.37
Today daily open 0.6436
 
Trends
Daily SMA20 0.6269
Daily SMA50 0.6273
Daily SMA100 0.6447
Daily SMA200 0.6626
 
Levels
Previous Daily High 0.6464
Previous Daily Low 0.6283
Previous Weekly High 0.6353
Previous Weekly Low 0.6212
Previous Monthly High 0.633
Previous Monthly Low 0.6061
Daily Fibonacci 38.2% 0.6394
Daily Fibonacci 61.8% 0.6352
Daily Pivot Point S1 0.6325
Daily Pivot Point S2 0.6213
Daily Pivot Point S3 0.6144
Daily Pivot Point R1 0.6506
Daily Pivot Point R2 0.6575
Daily Pivot Point R3 0.6686

 

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD eyes more weakness despite higher-than-expected monthly Retail Sales data

AUD/USD eyes more weakness despite higher-than-expected monthly Retail Sales data

The AUD/USD pair is expected to slip down to near 0.6400 despite the release of the lower-than-expected monthly Retail Sales data. The economic data has landed at 0.6%, higher than the estimates of 0.4%, but lower than the prior release of 1.3%.

AUD/USD News

EUR/USD renews 22-year low as yields propel DXY, focus on ECB vs. Fed drama, energy crisis

EUR/USD renews 22-year low as yields propel DXY, focus on ECB vs. Fed drama, energy crisis

EUR/USD takes offers to refresh multi-year low during seven-day downtrend. US Treasury yields rally to fresh cycle highs amid fears of economic slowdown, hawkish central banks. Energy crisis in Eurozone joins fears of more drama on the Russia-Ukraine issue to keep bears hopeful.

EUR/USD News

Gold turns sideways around $1,630 as investors await Fed Powell’s speech

Gold turns sideways around $1,630 as investors await Fed Powell’s speech

Gold price is displaying a dull performance as investors have sidelined ahead of the speech from Fed chair Jerome Powell. The precious metal is juggling around $1,630.00 after a modest decline from the critical hurdle of $1,640.00.

Gold News

Binance Coin price could shed more than 10% if this trend continues

Binance Coin price could shed more than 10% if this trend continues

Binance Coin price has been on a downtrend for quite some time and has intensified after the recent sell-off in Bitcoin price. Investors need to pay close attention to the BNB’s moves over the last three weeks, which revealed a bearish setup.

Read more

Lower gas prices and favorable views of labor market again boost confidence

Lower gas prices and favorable views of labor market again boost confidence

The Consumer Confidence Index rose to its highest level since April, and now sits more than 12 points higher than where it was just two months ago. Falling gasoline prices and a still-tight labor market are the main reasons we have seen a recent rebound in confidence.

Read more

Forex MAJORS

Cryptocurrencies

Signatures