#NZDUSD @ 0.61728 remains mildly bid even as Reserve Bank of New Zealand announced 75 bps lift in the benchmark interest rate., @nehcap view: Bullish (Pivot Orderbook analysis)

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• NZD/USD remains mildly bid even as Reserve Bank of New Zealand announced 75 bps lift in the benchmark interest rate.
• Fears of recession, China Covid woes challenge New Zealand Dollar buyers.
• Multiple statistics from the United States, Minutes of the latest US Federal Reserve (Fed) meetings will offer clear directions.

The pair currently trades last at 0.61728.

The previous day high was 0.6163 while the previous day low was 0.6093. The daily 38.2% Fib levels comes at 0.6136, expected to provide support. Similarly, the daily 61.8% fib level is at 0.612, expected to provide support.

NZD/USD pares the Reserve Bank of New Zealand (RBNZ) inspired gains as it retreats to 0.6160 heading into Wednesday’s European session. In doing so, the New Zealand Dollar (NZD) struggles to cheer hawkish moves of the RBNZ amid mixed sentiment and cautious mood ahead of the key data/events.

The New Zealand Dollar’s latest weakness could be linked to the fears of recession spread by downbeat comments from the RBNZ Governor Adrian Orr.

Reserve Bank of New Zealand matched market forecasts while announcing 75 basis points (bps) of a rate hike during its updates to convey the tenth interest rate lift on Thursday. The RBNZ also raised inflation forecasts during its quarterly economic projections while suggesting a peak Official Cash Rate (OCR) of 5.5%, versus 4.25% at the latest.

As a result, the New Zealand Dollar traders should have seen the central bank’s move as utterly hawkish due to not only the pace of the rate increase but the predictions for the OCR peak as well.

It should be noted, however, that downbeat economic forecasts suggesting New Zealand’s recession in 2023 and sour comments from New Zealand Finance Minister Grant Robertson also challenged the New Zealand Dollar buyers.

That said, New Zealand’s 10-year Treasury bond yields jumped 3.87% intraday to 4.30% following the RBNZ move while Auckland’s benchmark equity index NZX50 dropped 0.70% intraday by the press time.

China’s daily coronavirus counts head towards the record top marked in April while the virus numbers from Beijing, Shanghai and Chongqing also increased. On the same line were headlines from the South China Morning Post (SCMP) quoting Nomura’s Chief Economist Lu Ting as saying, “China’s economic growth next year appears to entirely hinge on a potential exit from its zero-covid policy, and even if such a shift occurs, more pain is inevitable before the real recovery.” Hence, Covid woes appear a drag for the New Zealand Dollar.

On the other hand, the scheduled releases of flash readings of November’s activity numbers for the US will precede the US Durable Goods Order for October and the Federal Open Market Committee (FOMC) Meeting Minutes also keep the New Zealand Dollar traders on the edge. The reason could be linked to the recently mixed messages from the United Stated economic data and comments from the Federal Reserve (Fed) officials.

While most of the scheduled data from the US are less likely to offer any clear signals, unless providing strong numbers, the New Zealand Dollar traders will pay attention to the Minutes of the latest Federal Reserve Meeting for clear directions. Should the Fed convey increasing odds of easing the rate hike bias, the Kiwi Dollar may have a reason to remain firmer. Otherwise, a pullback can’t be ruled out.

NZD/USD remains inside a one-week-old trading range between 0.6210 and 0.6060, despite the Reserve Bank of New Zealand (RBNZ) inspired moves.

In addition to the aforementioned trading range, the 200-day Exponential Moving Average (EMA) also adds strength to the 0.6210 hurdle for the New Zealand Dollar buyers.

It’s worth noting, however, that the lower highs on the Relative Strength Index (RSI) placed at 14 also challenge the Kiwi pair’s short-term upside. Even so, the bullish signals from the Moving Average Convergence and Divergence (MACD) indicator keep the New Zealand Dollar on the buyer’s radar.

On the flip side, pullback moves have multiple barriers to challenge the NZD/USD traders, apart from the bottom of the previously mentioned range near 0.6060.

Among them, the 100-day EMA level surrounding 0.6020 could initially challenge the New Zealand Dollar bears before highlighting the 0.6000 psychological magnet and an upward-sloping trend line from October 13, close to 0.5950 at the latest.

Overall, NZD/USD remains on the buyer’s radar unless the New Zealand Dollar sellers break 0.5950 support.

Trend: Bullish

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.6156 at the time of writing. Pair opened at 0.6152 and is trading with a change of 0.07% % .

The pair is trading above its 20 Daily moving average @ 0.5972, above its 50 Daily moving average @ 0.5827 , above its 100 Daily moving average @ 0.6017 and below its 200 Daily moving average @ 0.6307

The previous day high was 0.6163 while the previous day low was 0.6093. The daily 38.2% Fib levels comes at 0.6136, expected to provide support. Similarly, the daily 61.8% fib level is at 0.612, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.611, 0.6067, 0.604
• Pivot resistance is noted at 0.6179, 0.6206, 0.6249

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