The NZDUSD currency pair is having difficulty maintaining its position near the significant psychological level of 0.5900.

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• NZD/USD struggles to hold ground near the 0.5900 psychological level.

The pair currently trades last at 0.58817.

The previous day high was 0.5942 while the previous day low was 0.5862. The daily 38.2% Fib levels comes at 0.5911, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5892, expected to provide resistance.

NZD/USD retreats from the intraday high as a result of a recovery in the US Dollar (USD), trading higher around 0.5900 during the European session on Friday. The yields on US bonds have trimmed the daily losses, which might contribute to the support in underpinning the Greenback.

US Dollar (USD) remains robust, buoyed by the consistent flow of positive economic data concerning the state of the US economy. The US Dollar Index (DXY), which measures the performance of the Greenback against six other major currencies, is presently trading around 104.90. It’s worth noting that it has moderated slightly from its peak on Thursday, which marked its highest level since April.

As said, labor data released on Thursday from the United States (US) showed that as of September 1, US Initial Jobless Claims declined to 216K, indicating a decrease from the previous figure of 229K. This figure was lower than the expected rise of 234K. Furthermore, in the second quarter (Q2), US Unit Labor Costs rose to 2.2%, up from the previous 1.6%, which was contrary to expectations of it remaining consistent.

Additionally, US Federal Reserve (Fed) is anticipated to sustain elevated interest rates over a prolonged period. Furthermore, there is an expectation that the Fed will enact a 25 basis point (bps) interest rate hike by the end of the year 2023. This hawkish sentiment is exerting substantial pressure on the NZD/USD pair.

On China-linked fears, Chinese President Xi Jinping has decided not to participate in the upcoming G20 leaders’ summit in New Delhi this Saturday. This may exacerbate the existing tensions within the already fragile and deteriorating relationship between China and the United States (US). This situation is particularly noteworthy given the presence of US President Joe Biden at the event.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.5902 at the time of writing. Pair opened at 0.5875 and is trading with a change of 0.46 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.5935, 50 SMA 0.6085, 100 SMA @ 0.6126 and 200 SMA @ 0.6213.

The previous day high was 0.5942 while the previous day low was 0.5862. The daily 38.2% Fib levels comes at 0.5911, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.5892, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.5844, 0.5813, 0.5764
• Pivot resistance is noted at 0.5924, 0.5973, 0.6004

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