- NZD/USD bears are treading firm bullish ground on demand.
- The RBNZ is now a key focus of the market with an eye on 0.6000.
The NZD/USD was lower on the day as the USD pushed the commodity bloc lower again, with the NZD hanging above a key support level around 0.5950. At the close of the New York session, NZD/USD lost 0.5% on the day after a USD resurgence sent bulls reeling.
The kiwi is down this morning, having broken more convincingly below 0.60 overnight, as risk appetite falters and US bond yields rise again. The more substantial overnight move should quell any debate over whether or not the 0.60 level has been broken sustainably, and technically puts 0.5940 (the 76.4% Fibo of the 2020/21 rally) and 0.5915 (2020/21 rally) in the spotlight. May 2020 low after April 2020 rebound), ANZ Bank analysts explained.
Heading into next week’s key meeting, markets are expecting 75 basis points when their policy committee meets next week and the market is expecting a smaller increase. However, there is a one in five chance that the Fed will raise rates by a full percentage point, up from zero a day before the CPI report, according to FEDWATCH.
FX sentiment continues to be buoyed by the dollar and the world, with the Kiwi struggling to gain support from yesterday’s Gross Domestic Product data. Surprising as it is, given the magnitude of the loss, what it tells us is that the market will be sensitive to the Fed’s decision to raise interest rates by 75 or 100 basis points next week,” the analysts said.
Technical levels
Source: Fx Street
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