NZD/USD: Struggles to defy second weekly loss around mid-0.6600s

NZD/USD pauses declines from 0.6709 but fails to recover past-0.6658.
New Zealand Business NZ PMI slipped below 66.8 forecast to 50.7, Food Price Index beat 0.2% market consensus to 0.7% in August.
Risk reset can’t ignore broad challenges to market sentiment.
US dollar strength favor the bears, eyes on the American CPI.

Anil Panchal FXStreet

NZD/USD attempts recovery around 0.6650 during Friday’s Asian session. However, mixed set of data and heavy blocks to the market’s latest risk reset continues to challenge the bulls. The quote dropped during three of the last four days, including Thursday, which in turn highlights odds of printing a second weekly loss amid a light calendar left to watch.

New Zealand data stay mixed…

August month economics from New Zealand (NZ) fails to offer any fresh impulse to the market players. While the Business NZ PMI dropped past-66.8 forecast and 58.8 prior to 50.7, the Food Price Index rose beyond 0.2% expected to 0.7% MoM.

Considering the mixed data and the absence of major catalysts up for publishing, traders will keep eyes on the risk factors for immediate direction. The same has been weighing down the quote off-late.

Be it the US-China tension or the Brexit pessimism, not to forget the coronavirus (COVID-19) resurgence and dismal hopes of the US stimulus, everything contributes to the global risk-off mood. In doing so, Wall Street and the US treasury yields mark the south-run while the US dollar index (DXY) keeps gains.

It should be noted that the Reserve Bank of New Zealand’s (RBNZ) green signals to the prices run-up, like those from the European Central Bank (ECB), fails to keep the bulls happy as the US dollar extends recovery from 28-month low even as the American economics are yet to improve. As a result, any further strength in the US data and/or the passing of the stimulus bill, which was again rejected overnight, will be a boost to the greenback and can weigh on the kiwi pair.

For the time being, today’s US Consumer Price Index (CPI) for August, expected 1.2% YoY versus 1.0% prior, will be the key after the previous day’s recovery in the Producer Price Index (PPI) rekindled hopes of fundamental strength. Other than the economics, the risk catalysts will be the key to watch.

Technical analysis

Although 50-day SMA restricts the pair’s immediate downside around 0.6615, repeated failures to cross July month’s high near 0.6715 keeps the bears hopeful.

Additional important levels

Overview
Today last price	0.6651
Today Daily Change	-33 pips
Today Daily Change %	-0.49%
Today daily open	0.6684

Trends
Daily SMA20	0.6633
Daily SMA50	0.6613
Daily SMA100	0.6432
Daily SMA200	0.6388

Levels
Previous Daily High	0.6688
Previous Daily Low	0.6601
Previous Weekly High	0.679
Previous Weekly Low	0.6668
Previous Monthly High	0.6764
Previous Monthly Low	0.6488
Daily Fibonacci 38.2%	0.6655
Daily Fibonacci 61.8%	0.6634
Daily Pivot Point S1	0.6627
Daily Pivot Point S2	0.6571
Daily Pivot Point S3	0.654
Daily Pivot Point R1	0.6714
Daily Pivot Point R2	0.6745
Daily Pivot Point R3	0.6801

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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