NZD/USD surges above the 50-DMA at 0.6729 amid growing fighting between Russia - Ukraine

Friday’s trading session so far witnessed risk appetite improved as European and US equities trade in the green, ahead of the weekend on a busy week in the financial markets. In the FX space, risk-sensitive currencies like the antipodeans led by the NZD and the AUD gains, while safe-haven status ones fall. At press time, the NZD/USD surges, trading at 0.6730.

Developments in the Ukraine – Russia conflict

Russia’s attack on Ukraine persists for the third straight day. However, Russias Vladimir Putin reportedly would send a delegation to Minsk for talks with Ukraine. The headline shifted the market mood positively, increasing demand for riskier assets.

It is worth noting that Bloomberg reported that Kyiv’s fall to Russian forces could happen in the next 24/48 hours. That could spur a swing in the market mood, increasing appeal for safe-haven status.

During the Asian session, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr crossed wires, saying, “We’re particularly concerned about inflation expectations,” considering conditions in Ukraine. The Governor also commented that it would “Keep the possibility of moving rates quicker if necessary.”

The US economic docket featured Durable Goods Orders for January, at 1.6% m/m, higher than 0.6%  estimated. Meanwhile, the Federal Reserve’s favorite inflation gauge, the PCE, rose to 6.1% y/y, higher than the 5.8% foreseen, while Core PCE rose to 5.2%, more than the 5.1% expected. Additionally, the University of Michigan Consumer Sentiment Final for February increased to 62.8, better than the 61.7

NZD/USD Price Forecast: Technical outlook

The NZD/USD is neutral biased, though it is trading above the 50-day moving average (DMA) at 0.6724, signaling that an uptrend would accelerate but would be subject to Friday’s daily close above the former.

IF that scenario plays as planned, the NZD/USD would be exposed to upward pressure. That said, the NZD/USD first resistance would be the February 23 high at 0.6809. Once cleared, the following resistance level would be the 100-DMA at 0.6850. Breach of the latter would expose January 13 daily high at 0.6890.