The NZDUSD pair, currently at 0.61749, is experiencing difficulties due to the increase in interest rates by the RBNZ, which is negatively impacting the country’s internal demand.

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• NZD/USD is going through a rough phase as higher interest rates by the RBNZ are denting domestic demand.

The pair currently trades last at 0.61749.

The previous day high was 0.6237 while the previous day low was 0.6191. The daily 38.2% Fib levels comes at 0.6209, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.622, expected to provide resistance.

The NZD/USD pair is declining towards the crucial support of 0.6150 as investors are expecting that the Federal Reserve (Fed) will not cut interest rates this year. The Kiwi asset is falling like a house of cards as the New Zealand administration is worried about the domino effects of higher interest rates by the Reserve Bank of New Zealand (RBNZ).

S&P500 futures have generated significant losses in Asia. US markets were closed on Monday therefore a volatile action is expected due to the extended weekend. The overall market mood is cautious that has trimmed appeal for risk-sensitive assets.

The US Dollar Index (DXY) is moderately climbed to near 102.60. A monetary policy statement delivered by Federal Reserve (Fed) chair Jerome Powell indicated that two interest rate hikes are in the pipeline and rate cuts are not appropriate this year. The street is convinced that the Fed will keep interest rates higher this year as inflationary pressures are twice the desired rate of 2% but will announce only one more interest rate hike as the economic outlook of the United Kingdom economy seems dismal.

Meanwhile, the NZ economy has already slipped into a technical recession. Q1 Gross Domestic Product (GDP) contracted by 0.1% followed by a 0.7% contraction registered in the prior quarter.

NZ Treasury has criticized higher interest rates from the RBNZ as the extremely restrictive monetary policy has dampened domestic demand.

Investors should note that RBNZ Governor Adrian Orr has raised interest rates to 5.50%, higher than interest rates in the US economy.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.617 at the time of writing. Pair opened at 0.6201 and is trading with a change of -0.5 % .

The pair is trading above its 20 Daily moving average @ 0.6114, below its 50 Daily moving average @ 0.6178 , below its 100 Daily moving average @ 0.6216 and above its 200 Daily moving average @ 0.6152

The previous day high was 0.6237 while the previous day low was 0.6191. The daily 38.2% Fib levels comes at 0.6209, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.622, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6182, 0.6163, 0.6136
• Pivot resistance is noted at 0.6229, 0.6256, 0.6275

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