The NZDUSD currency pair showed some improvement on Thursday, with a value of 0.60668. However, it is unlikely to experience significant upward movement in the near future.

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• NZD/USD gains some positive traction on Thursday, though the upside potential seems limited.

The pair currently trades last at 0.60668.

The previous day high was 0.6096 while the previous day low was 0.6044. The daily 38.2% Fib levels comes at 0.6064, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6076, expected to provide resistance.

The NZD/USD pair attracts some buying near the 0.6040 area during the Asian session on Thursday and for now, seems to have snapped a two-day losing streak. Spot prices currently trade around the 0.6060-0.6065 zone, up nearly 0.20% for the day, though remain well within the striking distance of a two-month low touched on Tuesday.

A subdued US Dollar (USD) demand turns out to be a key factor lending support to the NZD/USD pair amid some repositioning trade ahead of the latest US consumer inflation figures, due later today. Apart from this, hopes for additional stimulus measures from China further benefit antipodean currencies, including the New Zealand Dollar (NZD). That said, growing concerns about the worsening economic conditions in China, fueled by the incoming weaker macro data, might keep a lid on any meaningful upside.

In fact, Chinese inflation figures released on Wednesday showed that the headline CPI turned negative for the first time since February 2021 and the Producer Price Index (PPI) fell for the 10th consecutive month in July. This comes on the back of rather disappointing trade data on Tuesday and suggested that the post-COVID economy recovery is losing steam. Adding to this, the prospects for further policy tightening by the Federal Reserve (Fed) limit the USD downside and might contribute to capping the NZD/USD pair.

Market participants now seem convinced that the US central bank will stick to its hawkish stance and keep interest rates higher for longer amid expectations of a soft landing for the resilient domestic economy. This, in turn, remains supportive of elevated US Treasury bond yields and favours the USD bulls. Traders, however, seem reluctant to place aggressive bets and look to the US CPI report for clues about the Fed’s rate-hike path. This, in turn, will drive the USD demand and provide a fresh impetus to the NZD/USD pair.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.6061 at the time of writing. Pair opened at 0.6052 and is trading with a change of 0.15 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6191, 50 SMA 0.6167, 100 SMA @ 0.6189 and 200 SMA @ 0.6232.

The previous day high was 0.6096 while the previous day low was 0.6044. The daily 38.2% Fib levels comes at 0.6064, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6076, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6032, 0.6012, 0.598
• Pivot resistance is noted at 0.6084, 0.6116, 0.6136

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