#NZDUSD @ 0.58924 has printed a fresh two-year low at 0.5883 as investors await Fed policy. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• NZD/USD has printed a fresh two-year low at 0.5883 as investors await Fed policy.
• Investors have started incorporating the impact of hawkish Fed policy into risk-sensitive assets.
• Kiwi bulls failed to capitalize on upbeat Business NZ PMI data.

The pair currently trades last at 0.58924.

The previous day high was 0.5976 while the previous day low was 0.5885. The daily 38.2% Fib levels comes at 0.592, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5941, expected to provide resistance.

The NZD/USD pair has slipped below Tuesday’s low and has refreshed its two-year low at 0.5883 in the Tokyo session. The kiwi bulls look extremely weak and are expected to decline further as the US dollar index (DXY) is preparing for a fresh rally ahead of the interest rate decision by the Federal Reserve (Fed). The DXY has defended the momentum loss and is looking to resume its upside journey. The mighty DXY has refreshed its two-week high above 110.30.

In order to address the foremost priority of bringing price stability to the US economy, the Fed is going to hike the interest rates significantly. As per the CME FedWatch tool, the chances of announcing a 75 basis point (bps) rate hike are 82%. While a full percent rate hike alternative carries an 18% probability. As market participants are already incorporating the impact of higher interest rates in the risk-perceived and risk-averse assets, the focus is shifting towards interest rate guidance.

The survey from the Financial Times this week indicates that the interest rates will top around 4-5% in 2023. However, the aggressive approach will stay longer beyond 2023. An adaptation of a ‘neutral’ policy will be optimal if the Fed policymakers observe a series of slowdowns in the inflation rate.

Meanwhile, kiwi bulls have failed to capitalize on upbeat Business NZ PMI. The economic data landed at 58.6, much higher than the prior release of 54.4. The unchanged monetary policy by the People’s Bank of China (PBOC) weakened the kiwi bulls. A dovish stance on Prime Lending Rate (PLR) was expected by the PBOC amid commitment towards spurting growth outlook and inflation rate.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.589 at the time of writing. Pair opened at 0.5892 and is trading with a change of -0.03 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6072, 50 SMA 0.6188, 100 SMA @ 0.6265 and 200 SMA @ 0.6515.

The previous day high was 0.5976 while the previous day low was 0.5885. The daily 38.2% Fib levels comes at 0.592, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5941, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.5859, 0.5827, 0.5768
• Pivot resistance is noted at 0.595, 0.6009, 0.6041

[/s2If]
Join Our Telegram Group