Market Analysis – NZDUSD
Today, during the Asian, and the first half of the European session, the NZDUSD currency pair is not moving in any major direction as the asset awaits for new drivers to appear on the market. The asset’s price is currently moving sideways within a symmetrical triangle pattern as the price has slightly increased since the start of trading, but opened at a lower price than the market close of Friday.
Last week, trades passed without any noticeable fluctuations, which was due to the poor USD positions and the emergence of ambiguous macroeconomic statistics. By the end of the week, the USD recovered slightly, supported by renewed growth in Treasury yields. However, the more confident growth was hampered by statistics on manufacturing inflation, which resumed speculation in the market on a possible correction of the US Federal Reserve’s monetary policy in the future.
Speaking on Friday at a virtual debate on the global economy organized by the IMF, US Federal Reserve Chairman Jerome Powell said that the economic recovery after the pandemic is uneven and needs to be accelerated. Nevertheless, he confirmed that a temporary jump in prices, which could be observed soon, would not lead to a significant increase in inflation indicators. The situation with the coronavirus pandemic in the country continues to be difficult.
The incidence is increasing despite the complete vaccination of 20% of the population. Finally, yesterday, the American administration blacklisted seven Chinese companies associated with the use of Chinese supercomputers. The American authorities accuse them of cooperation with the armed forces of the PRC, which poses a threat to the US National Security Administration. These actions could lead to further deterioration of relations between the two world economic leaders.
The US Dollar continues to decline against most currencies as it did the week before. The US Dollar index is currently trading at 92.111 and below the 30 day average movement on all charts except the daily. As mentioned previously, the New Zealand Dollar is attempting to correct upwards and is trading just above the neutral pricing on the Fibonacci Indicator. If the asset is able to cross above the resistance level of 0.7039, the next price resistance will be 0.7064.
On Monday, traders are focused on the publication of the monthly report on the state of the US budget for March. Experts predict some improvement in the budget deficit, but even in this case, it is likely to show an impressive –265B;also, Boston Fed Chairman, Eric Rosengren, is expected to make a speech during the day. In addition to the above, traders will also be monitoring closely tomorrow’s CPI figures which are closely related to the overall inflation rate. Lastly, on Wednesday we will also have the release on the National New Zealand Interest Rate, along with the accommodating speech by the head of the central bank regarding the economic outlook.
Resistance levels: 0.7050, 0.7100, 0.7150, 0.7200.
Support levels: 0.7000, 0.6954, 0.6913, 0.6853.