#NZDUSD @ 0.59660 takes offers to drop to the fresh low since May 2020. (Pivot Orderbook analysis)

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• NZD/USD takes offers to drop to the fresh low since May 2020.
• New Zealand Business NZ PMI improved in August but the firmer yields, hawkish Fed bets favor USD bulls.
• Risks emanating from China, Europe also weigh on Kiwi pair.
• China’s monthly data dump, preliminary readings of Michigan CSI for September eyed for intraday moves, risk catalysts are the key.

The pair currently trades last at 0.59660.

The previous day high was 0.6025 while the previous day low was 0.5976. The daily 38.2% Fib levels comes at 0.6006, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5995, expected to provide resistance.

NZD/USD stands on the slippery ground as it renews the two-year low around 0.5955 during the initial Asian session on Friday. The kiwi pair broke the 0.6000 psychological magnet the previous day amid broad US dollar strength. In doing so, the quote ignored the firmer prints of the latest activity data from New Zealand (NZ), as well as the second quarter (Q2) Gross Domestic Product (GDP).

Recently, New Zealand’s Business NZ PMI for August rose to 54.9 versus 52.5 market forecasts and 52.7 prior. On Thursday, NZ Q2 GDP grew 1.7% QoQ compared to 1.0% market expectations and a prior contraction of 0.2%, per the latest report from Statistics New Zealand. The YoY figures came in as 0.4% versus 0.2% expected and 1.2% previous readouts.

On the other hand, US Retail Sales rose 0.3% in August versus 0.0% expected and July’s revised down -0.4%. Further, NY Fed Empire State Manufacturing Index improved to -1.5 in September compared to -31.3 in August and market expectation of -13. Alternatively, Philadelphia Fed Manufacturing Index declined to -9.9 for the said month compared to 2.8 expected and 6.2 prior. Additionally, US Industrial Production slid to -0.2% in August versus a market expectation for an expansion of 0.1% and downwardly revised prior to 0.5%.

Not only the firmer US data but escalating energy crisis in Europe and fears that China will have tough days ahead also weighed on the NZD/USD prices. On the same line could be the hawkish Fed bets ahead of the next week’s Federal Open Market Committee (FOMC).

Bloomberg ran a piece suggesting that China is likely to witness harder days than it witnessed in 2020. On the same line was the news surrounding the Sino-American tussles and the People’s Bank of China’s (PBOC) inaction. Elsewhere, fears that the Eurozone will remain in dire conditions despite having a good stock for winter joined hawkish comments from the European Central Bank (ECB) policymakers to keep the pessimism higher.

While portraying the mood, Wall Street closed in the red and the US Treasury bond yields were firmer. Further, the market’s pricing of the Fed’s 0.75% and 1.0% rate hikes in the next week’s Federal Open Market Committee (FOMC) also rose to 80% and 20% in that per the CME’s FedWatch Tool.

While the risk-off mood and strong US dollar weighed on the NZD/USD prices, China’s monthly data dump including the Industrial Production, Retail Sales and housing numbers for August could offer immediate directions. Following that, preliminary readings of the Michigan Consumer Sentiment Index (CSI) will be crucial for nearby directions. Above all, bears are likely to keep reins amid anxiety ahead of the Fed meeting.

A clear downside break of the 0.6000 threshold directs NZD/USD bears towards the 0.5920 support confluence including May 2020 low and a four-month-old descending support line.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.5958 at the time of writing. Pair opened at 0.6003 and is trading with a change of -0.75% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6126, 50 SMA 0.6204, 100 SMA @ 0.6286 and 200 SMA @ 0.6532.

The previous day high was 0.6025 while the previous day low was 0.5976. The daily 38.2% Fib levels comes at 0.6006, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5995, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.5977, 0.5952, 0.5928
• Pivot resistance is noted at 0.6027, 0.605, 0.6076

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