NZDUSD @ 0.63121 – Support/Resistance analysis: retreats sharply from post-RBNZ high, drops to one-week low near 0.6300 mark

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NZDUSD @ 0.63121 – Support/Resistance analysis: retreats sharply from post-RBNZ high, drops to one-week low near 0.6300 mark

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• NZD/USD fails to capitalize on the post-RBNZ gains and turns lower for the third successive day.
• Recession fears continue to act as a headwind for the risk-sensitive kiwi amid fresh USD buying.
• Hawkish Fed expectations, elevated US bond yields underpin the buck ahead of FOMC minutes.

The pair currently trades last at 0.63121.

The previous day high was 0.6393 while the previous day low was 0.6317. The daily 38.2% Fib levels comes at 0.6346, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6364, expected to provide resistance.

The NZD/USD pair witnesses an intraday turnaround from the 0.6385 area, or the daily high touched after the Reserve Bank of New Zealand (RBNZ) policy decision. Spot prices turn lower for the third successive day on Wednesday and drop to a one-week low, around the 0.6300 mark during the early European session.

The RBNZ announced a fourth consecutive 50 bps rate hike on Wednesday and pointed to the need to bring forward the timing of further rate increases. The initial market reaction, however, fizzles out rather quickly amid the prevalent cautious mood, which continues to act as a headwind for the risk-sensitive kiwi.

The market sentiment remains fragile amid worries about a global economic downturn, further fueled by the disappointing Chinese macro data released on Tuesday. Apart from this, the underlying bullish tone surrounding the US dollar prompts fresh selling around the NZD/USD pair and contributes to the intraday decline.

The USD stands tall near the monthly peak touched the previous day amid firming expectations that the Fed would stick to its aggressive policy tightening path. The bets were lifted by hawkish remarks by several Fed officials, stressing that it is too soon to declare a victory on inflation despite the softer US CPI report.

This, in turn, remains supportive of elevated US Treasury bond yields and underpins the buck. Traders, however, seem reluctant and prefer to move on the sidelines ahead of the FOMC meeting minutes, which would be looked upon for clues about the possibility of a larger 75 bps Fed rate hike move at the September meeting.

In the meantime, the US monthly Retail Sales figures, due for release later during the early North American session, might influence the USD price dynamics. Apart from this, traders would take cues from the broader market risk sentiment to grab short-term opportunities around the NZD/USD pair.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.6311 at the time of writing. Pair opened at 0.6347 and is trading with a change of -0.57 % .

The pair is trading above its 20 Daily moving average @ 0.63, above its 50 Daily moving average @ 0.6267 , below its 100 Daily moving average @ 0.643 and below its 200 Daily moving average @ 0.6615

The previous day high was 0.6393 while the previous day low was 0.6317. The daily 38.2% Fib levels comes at 0.6346, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6364, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6312, 0.6276, 0.6235
• Pivot resistance is noted at 0.6388, 0.6428, 0.6464

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