NZD/USD struggles below 0.6600 mark, lowest since March 2016


   •  Dovish RBNZ-led selling pressure remains unabated.
   •  Resurgent USD demand adds to the bearish pressure.
   •  Traders now look to the US CPI print for fresh impetus.

The NZD/USD pair weakened farther below the 0.6600 handle and dropped to fresh 2-1/2 year lows in the last hour, albeit recovered few pips thereafter.

The New Zealand Dollar came under some intense selling pressure on Thursday in reaction to RBNZ's more accommodative policy stance, now forecasts the first hike in the third quarter of 2020 - a full year later than previously projected. 

This coupled with resurgent US Dollar demand, supported by hawkish comments from Chicago Fed President Charles Evans, further contributed towards aggravating the bearish pressure surrounding the major. 

Evans, a known dove, said that the US economy is performing very well and continued growth has cleared the way for one or two more interest rate hikes in 2018. 

The USD upsurge extended through the Asian session on Friday, lifting the key US Dollar Index to over 13-month tops, and kept exerting downward pressure, dragging the pair to its lowest level since March 2016. 

The selling bias now seems to have receded a bit, at least for the time being, as investors now look forward to the latest US consumer inflation figures for some fresh impetus on the last trading day of the week. 

Technical levels to watch

A follow-through weakness below the 0.6570-65 horizontal zone is likely to get extended towards the key 0.6500 psychological mark before the pair eventually drops to 0.6445-40 support area. On the flip side, 0.6620 area (session high) now seems to act as an immediate hurdle and is followed by resistance near the 0.6655-60 region, above which the pair is likely to aim towards reclaiming the 0.6700 round figure mark.
 

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

GME stock positioned for another short squeeze

Get the full analysis and chart in our Insights. Upgrade to Premium today    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Dollar advances ahead of Fed

The greenback advanced on Friday to close the week with gains against most of its major rivals, with EUR/USD settling just above the 1.2100 level after trading as low as 1.2092. The focus is on the US Federal Reserve monetary policy meeting next Wednesday.

EUR/USD News

GBP/USD: Brexit tensions and reopening delays to hit the pound

The GBP/USD pair edged lower on Friday but held above the weekly low at 1.4072 and settled a few pips above the 1.4100 mark. British PM Johnson expressed “serious concern” about the spread of the Delta variant. GBP/USD at risk of falling further, mainly on a break below 1.4070.

GBP/USD News

Gold tests key trend line ahead of FOMC meeting

Gold spent the first half of the week trading in a relatively tight range as buyers could not hold the price above $1,900. Following a sharp decline to a six-day low of $1,869 on Thursday, the XAU/USD pair managed to stage a recovery and closed the day in the positive territory.

Gold News

Ethereum price prepares for a bullish weekend, targeting $3,000

Ethereum price seems prime to revisit $3,000. Although ETH faces resistance at $2,300, the upswing seems imminent. A downswing below $2,000 could invalidate the bullish thesis. 

Read more

Hot Inflation is warming the seat for the June FOMC

Americans are seeing the fastest price increases since their seventh-graders were born as inflation builds into the US economy from the disruptions of the pandemic lockdowns. Core CPI at 3.8% is the steepest gain in 29 years.

Read more

Forex MAJORS

Cryptocurrencies

Signatures