NZD/USD's upside attempts remain limited below 0.6970/80


  • Kiwi's rebound from 0.6910 stalls below 0.6970/80 resistance area.
  • The dollar loses ground with the US yield curve flattening.
  • The FOMC minutes confirm QE tapering before the end of the year.

New Zealand's dollar has bounced up from session lows at 0.6910 on Wednesday to erase Tuesday’s losses, favoured by a somewhat softer US dollar. The pair however has stalled below the top of the last week’s trading range at 0.6970/80

The USD treads water as the US yield curve flattens

The kiwi has been favored by a moderate USD weakness on Wednesday with the flattening US yields’ curve weighing on the US dollar. The yield of the US 10-year note has dropped to 1.54% on Wednesday from 5-month highs at 1.61% on Tuesday while the 2-year yield surged to 18-month highs.

The economic calendar has failed to offer support to the dollar. The minutes of Federal Reserve’s September’s meeting have supported the idea that QE tapering might be officially announced next month, stating that “a gradual tapering process that concluded around the middle of next year would likely be appropriate”

Beyond that, some participants have acknowledged that inflation pressures might remain for a longer than expected period and have suggested the possibility of start hiking interest rates by the end of next year.

Previously, the US CPI confirmed market expectations that high inflation remains looming over the post-pandemic recovery, which bears into question Fed Powell’s theory of “temporary” inflation. Consumer prices accelerated to a 0.4% monthly pace in September, from 0.3% in August, with the yearly inflation increasing to 5.4% from 5.3% on the previous month.

Technical levels to watch

NZD/USD

Overview
Today last price 0.6956
Today Daily Change 0.0020
Today Daily Change % 0.29
Today daily open 0.6936
 
Trends
Daily SMA20 0.6982
Daily SMA50 0.7005
Daily SMA100 0.7032
Daily SMA200 0.7106
 
Levels
Previous Daily High 0.6971
Previous Daily Low 0.6923
Previous Weekly High 0.6984
Previous Weekly Low 0.6876
Previous Monthly High 0.7171
Previous Monthly Low 0.6859
Daily Fibonacci 38.2% 0.6941
Daily Fibonacci 61.8% 0.6953
Daily Pivot Point S1 0.6915
Daily Pivot Point S2 0.6895
Daily Pivot Point S3 0.6867
Daily Pivot Point R1 0.6963
Daily Pivot Point R2 0.6991
Daily Pivot Point R3 0.7011

 

 

 

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