#NZDUSD @ 0.56318 has printed a fresh two-year low at 0.5619 on expectations of a hawkish Fed Powell’s speech. (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 0.5619 on expectations of a hawkish Fed Powell’s speech.
• The current pace of hiking interest rates by the Fed is expected to slow down ahead.
• Kiwi’s Buildings Permit data is seen lower at 2% vs. the prior release of 5%.

The pair currently trades last at 0.56318.

The previous day high was 0.5755 while the previous day low was 0.5625. The daily 38.2% Fib levels comes at 0.5675, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5705, expected to provide resistance.

The NZD/USD pair has slipped below the most traded auction area, which is placed in a range of 0.5624-0.5722 in the Asian session. The asset has refreshed its two-year low at 0.5619 and is expected to display more weakness amid negative market sentiment. The major is expected to find a cushion around 0.5476 as the speech from Federal Reserve (Fed) chair Jerome Powell will spook the sentiment of the market participants further.

As the Fed is bound to curtail the galloping inflationary pressures, the discussion will be more on hiking interest rates at the ongoing pace. The current pace of hiking interest rates is firmer and will continue this year.

Considering the deviation in current rates of 3-3.25% and the optimal terminal rate at 4.6%, the Fed is required to elevate its interest rates further to 1.35% by the conclusion of 2023. Two monetary policies are still to be announced in 2022 scheduled in November and December. A continuation of the current pace of hiking will cover the deviation in 2022 only. Therefore, the Fed is expected to slow down its current pace of hiking interest rates and will make gradual steps from now.

Meanwhile, the US dollar index (DXY) has recaptured its elevated arena after lower-than-expected US Durable Goods Orders data. The decline in demand for Durable Goods was recorded lower at 0.2% than the expectations of a decline of 0.4%. There is no denying the fact that accelerated interest rates will have their consequences on durables demand, so a lesser-than-expected decline is healthy for the economy.

On the kiwi front, the release of the monthly Building Permits data will be a key trigger. The economic data is expected to trim to 2% against the prior print of 5%. A lower-than-expected figure will weaken the antipodean.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.5621 at the time of writing. Pair opened at 0.5637 and is trading with a change of -0.28 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.5991, 50 SMA 0.6158, 100 SMA @ 0.6237 and 200 SMA @ 0.6495.

The previous day high was 0.5755 while the previous day low was 0.5625. The daily 38.2% Fib levels comes at 0.5675, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5705, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.559, 0.5542, 0.5459
• Pivot resistance is noted at 0.572, 0.5803, 0.585

[/s2If]
Join Our Telegram Group