NZD/USD struggles for direction, flat-lined above mid-0.7100s


  • NZD/USD witnessed a subdued/range-bound price action on Tuesday.
  • The risk-off impulse acted as a headwind for the perceived riskier kiwi.
  • Rising bets for another RBNZ rate hike helped limit losses for the pair.

The NZD/USD pair seesawed between tepid gains/minor losses through the early part of the European session and was last seen trading in the neutral territory, just above mid-0.7100s.

The pair struggled to capitalize on its gains recorded over the past two trading sessions and witnessed some selling near the 0.7175 resistance zone on Tuesday. A softer risk tone turned out to be a key factor that weighed on the perceived riskier kiwi, though the downside remains cushioned.

Investors turned cautious amid growing acceptance that rising inflationary pressures could force major central banks to hike interest rates earlier than anticipated. The nervousness prompted some profit-taking in the equity markets following the recent strong runup to record high levels.

Meanwhile, the risk-off impulse, along with the Fed's dovish outlook triggered a fresh leg down in the US Treasury bond yields. This, in turn, forced the US dollar to prolong its retracement slide from YTD tops touched on Friday and helped limit deeper losses for the NZD/USD pair.

Apart from this, rising bets for another rate hike by the RBNZ should act as a tailwind for the major and attract some dip-buying at lower levels. That said, traders might refrain from placing fresh bullish bets ahead of Wednesday's release of the US consumer inflation figures.

The markets have been pricing in the possibility of an interest rate hike move by the Fed in 2022 amid worries about a faster rise in inflation. The speculations were reaffirmed by the overnight hawkish comments by a slew of FOMC members, signalling that the central bank could raise rates.

The US CPI report for October will influence Fed rate hike expectations and influence the USD price dynamics, which, in turn, should provide a fresh directional impetus to the NZD/USD pair. In the meantime, traders might take cues from Tuesday's release of the US Producer Price Index (PPI) and Fed Chair Jerome Powell's remarks later during the early North American session.

Technical levels to watch

NZD/USD

Overview
Today last price 0.7158
Today Daily Change -0.0010
Today Daily Change % -0.14
Today daily open 0.7168
 
Trends
Daily SMA20 0.7123
Daily SMA50 0.7066
Daily SMA100 0.7026
Daily SMA200 0.71
 
Levels
Previous Daily High 0.7178
Previous Daily Low 0.7104
Previous Weekly High 0.7199
Previous Weekly Low 0.7072
Previous Monthly High 0.7219
Previous Monthly Low 0.6876
Daily Fibonacci 38.2% 0.715
Daily Fibonacci 61.8% 0.7132
Daily Pivot Point S1 0.7122
Daily Pivot Point S2 0.7075
Daily Pivot Point S3 0.7047
Daily Pivot Point R1 0.7196
Daily Pivot Point R2 0.7224
Daily Pivot Point R3 0.727

 

 

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