NZD/USD unable to break 0.6250, holds in a consolidation range
- US dollar gains momentum after US data and as Wall Street indexes trim gains.
- Market participants await Fed Chair Powell’s speech.
- NZD/USD moving between 0.6250 and 0.6150.
The NZD/USD peaked at 0.6250, the highest level since August 19, then pulled back toward 0.6200. The decline from the multi-day high took place amid a recovery of the US dollar.
The greenback started to gain momentum following the release of US economic data. The second reading of Q2 GDP showed the economy contracted at a 0.6% annualized rate, better than the previous estimate of a 0.9% contraction. A different report showed Jobless Claims (initial and continuing) dropped to the lowest levels in weeks.
The Jackson Hole Symposium started on Thursday. The key event will be Jerome Powell’s speech on Friday. His words are likely to have a significant impact across financial markets. Market participants will look for clues about the trajectory of the Fed’s monetary policy. Philadelphia Fed President Patrick Harker said on Thursday that he wants to see the next inflation reading before deciding what to do at the September FOMC meeting.
Earlier on Thursday, a report showed retail sales in New Zealand declined 2.3% in the second quarter. “It was the second straight quarter of weaker sales and raises the odds that the overall economy will also contract. Q2 GDP data will be reported on September 15. There is no consensus yet but the contraction will likely be worse than the -0.2% q/q posted in Q1,” mentioned analysts at Brown Brothers Harriman.
Short-term outlook
The NZD/USD continues to trade near the weekly low and the crucial support at 0.6150. If broken, a bearish acceleration seems likely. On the upside, the recovery found resistance at the 200-hour Simple Moving Average around 0.6250.
Ahead of the Asian session, a slide below 0.6200 would expose the daily low at 0.6175 and then the 0.6150 area. While a break above 0.6250 should clear the way for an extension of the recovery.
Technical indicators in the daily chart are still biased to the downside, despite the consolidation of the last four days. Under 0.6150, a test of the year-to-date low at 0.6057 seems likely.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
