NZD/USD: upward momentum begins to weaken
Current trend
The New Zealand dollar shows mixed trading dynamics against the US currency in the Asian session, consolidating near the support at around 0.6900.
Yesterday the instrument fell sharply, but this was due only to technical factors, as well as market hopes that the US Federal Reserve will accelerate the tightening of monetary policy in the near future. In particular, it is assumed that the regulator will raise the interest rate in May by 50 basis points at once, and will also launch quantitative tightening mechanisms. In addition, the benchmark 10-year US Treasury yield hit a multi-year high of 2.557% the day before, making the US currency even more attractive to invest in.
The demand for the US dollar is also supported by the development of the military conflict in Ukraine. Traders are frustrated with the negotiation process, which has not led to any results so far. In turn, the sanctions pressure is only increasing, and Russia is already preparing to take retaliatory measures. In particular, Russian President Vladimir Putin ordered all payments for gas to be converted into rubles, which many European countries considered a violation of existing contracts. In addition, the authorities of Shanghai, home to about 25 million people, have introduced a record in two years lockdown due to the outbreak of the coronavirus. For the duration of the restrictions, transport communication will be stopped, most enterprises will switch to a remote mode of operation. Experts believe that a prolonged lockdown could affect demand for commodities such as crude oil, as well as threaten to collapse the global economy.
Today, investors are awaiting the publication of a block of macroeconomic statistics from the US. Among other things, it is worth paying attention to the House Price Index from S&P/CaseShiller for January, as well as the March indicator of the level of consumer confidence. Also during the day, the President of the New York Fed and FOMC member John Williams is expected to speak.
Support and resistance
Bollinger Bands on the daily chart show a steady increase. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic is showing similar dynamics; however, the indicator line is rapidly approaching its lows, indicating the risks of NZD being oversold in the ultra-short term.
Resistance levels: 0.6924, 0.6960, 0.7000, 0.7050.
Support levels: 0.6866, 0.6840, 0.6795, 0.6766.
The New Zealand dollar shows mixed trading dynamics against the US currency in the Asian session, consolidating near the support at around 0.6900.
Yesterday the instrument fell sharply, but this was due only to technical factors, as well as market hopes that the US Federal Reserve will accelerate the tightening of monetary policy in the near future. In particular, it is assumed that the regulator will raise the interest rate in May by 50 basis points at once, and will also launch quantitative tightening mechanisms. In addition, the benchmark 10-year US Treasury yield hit a multi-year high of 2.557% the day before, making the US currency even more attractive to invest in.
The demand for the US dollar is also supported by the development of the military conflict in Ukraine. Traders are frustrated with the negotiation process, which has not led to any results so far. In turn, the sanctions pressure is only increasing, and Russia is already preparing to take retaliatory measures. In particular, Russian President Vladimir Putin ordered all payments for gas to be converted into rubles, which many European countries considered a violation of existing contracts. In addition, the authorities of Shanghai, home to about 25 million people, have introduced a record in two years lockdown due to the outbreak of the coronavirus. For the duration of the restrictions, transport communication will be stopped, most enterprises will switch to a remote mode of operation. Experts believe that a prolonged lockdown could affect demand for commodities such as crude oil, as well as threaten to collapse the global economy.
Today, investors are awaiting the publication of a block of macroeconomic statistics from the US. Among other things, it is worth paying attention to the House Price Index from S&P/CaseShiller for January, as well as the March indicator of the level of consumer confidence. Also during the day, the President of the New York Fed and FOMC member John Williams is expected to speak.
Support and resistance
Bollinger Bands on the daily chart show a steady increase. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic is showing similar dynamics; however, the indicator line is rapidly approaching its lows, indicating the risks of NZD being oversold in the ultra-short term.
Resistance levels: 0.6924, 0.6960, 0.7000, 0.7050.
Support levels: 0.6866, 0.6840, 0.6795, 0.6766.