#NZDUSD @ 0.63311 has refreshed its three-month high at 0.6335 on upbeat market sentiment. (Pivot Orderbook analysis)

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• NZD/USD has refreshed its three-month high at 0.6335 on upbeat market sentiment.
• The speech from Jerome Powell confirmed the termination of a 75 bps rate hike spell in December meeting.
• New Zealand Dollar has picked strength on upbeat Caixin Manufacturing PMI and the reopening of the Chinese economy.
• NZD/USD is expected to smash 0.6350 as the US Dollar is seeing more downside on policy moderation fears.

The pair currently trades last at 0.63311.

The previous day high was 0.6314 while the previous day low was 0.6189. The daily 38.2% Fib levels comes at 0.6266, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6237, expected to provide support.

NZD/USD is marching north firmly after shifting its auction profile above the round-level resistance of 0.6300 in the Asian session. The kiwi asset has refreshed its three-month high at 0.6335 as the New Zealand Dollar has been strengthened by a surprise rise in Caixin Manufacturing PMI data and a significant improvement in investors’ risk appetite post-Federal Reserve (Fed)’s commentary.

Fed Powell’s promise to moderate the extreme-tight monetary policy in the December meeting has infused fresh blood into risk-sensitive assets. S&P500 futures are gathering momentum adding more upside to Wednesday’s gains. The US Dollar Index (DXY) has surrendered its short-lived recovery attempt and is on the verge of refreshing its day’s low below 105.50. Meanwhile, the 10-year US Treasury yields have slipped again to 3.60% amid healthy demand for US government bonds by investors.

The commentary from Fed chair Jerome Powell has confirmed that the central bank is looking to slow down its interest rate hike pace. Catalysts that have compelled Fed Chair to sound less hawkish while providing interest rate guidance for December’s monetary policy meeting are a slowdown in labor demand, a decline in economic activities, and a soft October inflation report.

The Federal Reserve is bound to bring price stability to the United States economy but not at the cost of the economy. Fed Chair in his speech cited that it is not appropriate to ‘Crash the economy and clean it afterward’. This has confirmed that the Federal Reserve (Fed) won’t continue the 75 basis points (bps) rate hike spell now and may shift to a lower rate hike to 50 bps. As per the CME FedWatch tool, the chances of a 50 bps rate hike announcement by the Fed in the December meeting holds around 80%.

Another critical trigger that is going to keep US Dollar bulls on the tenterhooks in the United States Nonfarm Payrolls (NFP) data, which will release on Friday. As per the consensus, the United States economy added 200K jobs in November, lower than the prior release of 261K. Cues from US Automatic Data Processing (ADP) Employment data indicate that the additional payrolls in November are merely 127K. The Unemployment Rate is seen unchanged at 3.7%.

Apart from that, investors will keep an eye on Average Hourly Earnings data. The street is expecting that the next trigger that could create troubles for the Federal Reserve is rising wage prices. Wage inflation carries the capability of driving price inflation higher. Post a slowdown in inflation led by accelerating interest rates, the United States households will remain with higher earnings that could trigger retail demand.

In early Tokyo, IHS Markit reported a surprise rise in Caixin Manufacturing data. The economic data was released at 49.4 for November month vs. 48.9 as projected and October’s release of 49.2. Despite extreme lockdown measures in November by Chinese authorities to contain the COVID-19 epidemic, the economy has managed to display better-than-projected performance. This has strengthened the kiwi asset significantly as New Zealand is one of the leading trading partners of China.

Meanwhile, signs of the gradual opening of the Chinese economy led by relaxations in zero Covid-19 policy to return economic prospects on track have also strengthened the New Zealand Dollar.

NZD/USD has comfortably established above the 200-period Exponential Moving Average (EMA) at around 0.6200, which indicates that the long-term trend has turned bullish. Also, a bull cross, represented by the 20-and 50-EMAs at 0.5871, indicates a continuation of the upside. Going forward, the ultimate resistance is placed from August 12 high at 0.6470.

Apart from that, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is intact.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.634 at the time of writing. Pair opened at 0.6302 and is trading with a change of 0.6 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.61, 50 SMA 0.5862, 100 SMA @ 0.6022 and 200 SMA @ 0.6294.

The previous day high was 0.6314 while the previous day low was 0.6189. The daily 38.2% Fib levels comes at 0.6266, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6237, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6223, 0.6144, 0.6098
• Pivot resistance is noted at 0.6347, 0.6393, 0.6472

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