NZD/USD sticks to intraday gains, bulls flirt with 0.6360-70 resistance zone
FXStreet · 21 Jun 2022 1.1K Views
  • A combination of supporting factors pushed NZD/USD higher for the second straight day.
  • The risk-on impulse undermined the safe-haven USD and benefitted the risk-sensitive kiwi.
  • Hawkish Fed expectations, rising US bond yields to limit the USD losses and cap the major.

The NZD/USD pair attracted some buyers for the second straight day on Tuesday and climbed back to the 0.6365-0.6370 hurdle during the early part of the European session.

The US dollar came under renewed selling pressure amid signs that there will not be any consensus for more aggressive Fed rate hikes in the foreseeable future. Fed Governor Christopher Waller - a known hawk - said on Sunday that he was open to another rate hike of 75 bps in July, though ruled out the extreme scenario of a 100 bps hike. Apart from this, a generally positive tone around the equity markets further undermined the greenback's safe-haven demand and benefitted the risk-sensitive kiwi.

The markets, however, seem convinced that the Fed would stick to its policy tightening path to combat stubbornly high inflation, which surged to over a four-decade high in May. The bets were reaffirmed by the Fed's so-called dot plot, showing that the median projection for the federal funds rate stood at 3.4% for 2022 and 3.8% in 2023. This, in turn, pushed the US Treasury bond yields higher, which, along with recession fears, acted as a tailwind for the USD and capped the upside for the NZD/USD pair.

Investors remain concerned that a more aggressive move by major central banks to tackle inflation would pose challenges to the global economic recovery. This might keep a lid on any optimistic move in the markets, which, in turn, supports prospects for the emergence of USD dip-buying and warrants caution before placing bullish bets around the NZD/USD pair. Traders now look forward to the release of the Existing Home Sales data from the US for some impetus later during the early North American session.

Technical levels to watch

NZD/USD

Overview
Today last price 0.6362
Today Daily Change 0.0031
Today Daily Change % 0.49
Today daily open 0.6331
Trends
Daily SMA20 0.6427
Daily SMA50 0.6487
Daily SMA100 0.664
Daily SMA200 0.678
Levels
Previous Daily High 0.6365
Previous Daily Low 0.63
Previous Weekly High 0.6396
Previous Weekly Low 0.6197
Previous Monthly High 0.6569
Previous Monthly Low 0.6217
Daily Fibonacci 38.2% 0.634
Daily Fibonacci 61.8% 0.6325
Daily Pivot Point S1 0.6299
Daily Pivot Point S2 0.6266
Daily Pivot Point S3 0.6233
Daily Pivot Point R1 0.6364
Daily Pivot Point R2 0.6397
Daily Pivot Point R3 0.643

Affected Trading Instrument

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