Despite the rise in US Treasury yields, the NZD/USD pair remains stable at a level of 0.59348.

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• NZD/USD consolidates despite advanced US Treasury yields.

The pair currently trades last at 0.59348.

The previous day high was 0.5936 while the previous day low was 0.5895. The daily 38.2% Fib levels comes at 0.591, expected to provide support. Similarly, the daily 61.8% fib level is at 0.592, expected to provide support.

NZD/USD hovers around 0.5930 during the early hours of the Asian session on Monday, treading water to extend the gains registered in the previous trading session. The pair could face downward pressure, which could be attributed to the advanced United States (US) government bond yields. The 10-year Treasury yields hits its highest since 2007, which could contribute to strengthening the Greenback.

Kiwibank’s analysts said in a note that Official Cash Rate (OCR) track was more hawkish than expected. The RBNZ aims to ensure that the recent tightening measures have a significant impact on households in the upcoming months. Any considerations of reducing interest rates were intentionally suppressed to maintain elevated wholesale rates and to keep mortgage and other lending rates high.

Additionally, the monetary policy review (MPR) stated that the Reserve Bank of New Zealand (RBNZ) maintains its projection for the official cash rate (OCR) to stay at 5.5%. The MPR also indicated a probability of 40% for an additional 25 basis point (bps) increase in 2024. This potential development could exert an influence on the NZD/USD pair.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, trades hovers around 103.30. The US Dollar (USD) could be supported by the expectations that the Federal Reserve (Fed) will stick to its hawkish stance due to upbeat US macroeconomic data.

Market participants will closely watch the upcoming US Existing Home Sales Change (MoM) later in the North American session. Later in the week, the focus will also be on Fed Chair Jerome Powell’s speech during the Jackson Hole to get fresh insights into the overall US economic outlook and inflation situation.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.5926 at the time of writing. Pair opened at 0.5929 and is trading with a change of -0.05 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6062, 50 SMA 0.6146, 100 SMA @ 0.6166 and 200 SMA @ 0.6231.

The previous day high was 0.5936 while the previous day low was 0.5895. The daily 38.2% Fib levels comes at 0.591, expected to provide support. Similarly, the daily 61.8% fib level is at 0.592, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.5904, 0.5879, 0.5864
• Pivot resistance is noted at 0.5945, 0.596, 0.5985

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