- Mixed US macro data partially weighed on the US dollar.
- China’s attention to economic growth fueled optimism among speculators.
- NZD/USD is at risk of extending its last dip, especially once below 0.6230.
The general weakness of the US dollar helped the NZD/USD to reach a high of 0.6317 on Tuesday, but ended the day in the red, around 0.6245. Commodity currencies rallied during the first half of the day amid better market sentiment that weighed on the dollar, but managed to regain some ground before closing.
The Canadian dollar was the weakest currency as oil prices fell sharply in the past hour of trading, followed by the New Zealand dollar, which lost ground despite encouraging headlines on China. According to various news agencies, the country is moving away from its zero interest rate policy as the focus has shifted towards economic growth. There were also headlines indicating that the local health system is under pressure due to the multiplication of infections, but it was not enough to overshadow the good mood.
US data released after the long weekend was generally disappointing. The US Trade Balance for November posted a deficit of $83.3 billion, improving on the previous deficit of $98.8 billion. Wholesale inventories for the same month rose 1%, worse than the 0.7% expected, while the October house price index held steady. Finally, the Dallas Fed Manufacturing Business Index for December contracted to -18.8 from -14.4 the prior month.
NZD/USD Technical Outlook
On the 4-hour chart, the pair is trading below the 20 SMA, while the technical indicators are below their mid-lines. The intraday low at 0.6230 offers immediate support, followed later by 0.6155. The aforementioned 20 SMA is currently around 0.6270, the level to break to confirm further gains towards the 0.6340 price zone.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
