- The NZD/USD grinds higher on Tuesday, up some 0.52%.
- An improved market mood keeps the risk-sensitive currencies bid to the detriment of the US dollar.
- NZD/USD Technical Outlook: Bearish-biased but in the near-term is upwards.
After extending its losses to two consecutive days, the New Zealand dollar advances during the New York session, trading at 0.6749 at the time of writing. The market sentiment has improved, as witnessed by risk-sensitive peers rising, with the NZD gaining 0.52% against the buck, the most significant gain of the G8 currencies.
The market mood improved as investors assessment that vaccines helped tame the Omicron virus outbreak. Additionally, per Bloomberg’s report, the US FDA is poised to authorize pills from Pfizer and Merck to treat Covid-19 as soon as this week.
In the meantime, the US Dollar Index, which measures the greenback’s value versus its rivals, falls some 0.02%, sitting at 96.53, almost unchanged.
In the last hour or so, the US bond yields are rising strongly, with the 10-year benchmark note up six basis points, sitting at 1.480%, lifting the US dollar index.
Apart from this, an absent New Zealand and US economic docket would leave the NZD/USD traders lying in the dynamics of market sentiment. However, on Wednesday, the US economic docket would unveil the Personal Consumptions Expenditures (PCE), the Fed’s favorite inflation gauge, alongside the Gross Domestic Product, for the Q3.
NZD/USD Price Forecast: Technical outlook
The NZD/USD daily chart depicts that the NZD has recovered some ground against the greenback, at press time forming a bullish engulfing candle that could send the pair upwards. Nevertheless, the NZD/USD is bearish biased, as shown by the daily moving averages (DMAs) residing well above the spot price, near the 0.7000 figure.
If the NZD/USD extends its gains, the first resistance would be the December 17 high at 0.6800. A breach of the latter would expose the December 16 high at 0.6833, followed by the December 1 high at 0.6867.
On the flip side, the first support would be the YTD low, at 0.6700. A break beneath that level would expose crucial demand zones. The next one would be 0.6650, followed by the November 2, 2020, swing low at 0.6589.
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