NZD/USD drops to monthly lows during Powell’s speech

The NZD/USD fell to its lowest low since June 8, at 0.6070 during the American session.
Jerome Powell hinted at consecutive rate hikes driven by the labor market.
Markets discount higher probabilities of a 25 bps hike by the Fed in July, favoring the USD.

Patricio Martín FXStreet

The NZD/USD currency experienced significant selling pressure, reaching its lowest level since June 8 at 0.6070 during the American session. This downward movement was triggered by hints from Jerome Powell, the Chairman of the Federal Reserve (Fed), indicating the likelihood of consecutive interest rate hikes driven by the labor market. Consequently, market participants have started assigning higher probabilities to a 25 basis points hike by the Fed in July, strengthening the US Dollar against the New Zealand Dollar.

Hawkish bets on the Fed and easing economic-downturn fears boost the USD

On Wednesday, during the European Central Bank (ECB) forum in Sintra, Jerome Powell continued giving investors hawkish clues. He stated that he wouldn’t take a “move at consecutive meetings off the table” as the labor market may contribute to an uptick in inflation. Regarding economic activity, he mentioned that it is possible to get a downturn but that it's not “the most likely case”.

As per the CME FedWatch Tool, investors are betting on higher odds of nearly 84% of the Federal Reserve (Fed) hiking by 25 basis points (bps) at the next July 31 meeting. As a reaction, the Greenback, measured by the DXY index, trades near 103.00 with a 0.45% gain on the day.

On the other hand, Activity Outlook and Business Confidence data from the Australia and New Zealand Banking Group will be the highlight in early Thursday’s Asian session, which could affect the Kiwi’s price dynamics.

NZD/USD levels to watch

According to the daily chart, the technical outlook for the short term for the NZD/USD has turned negative as sellers gained significant momentum. The Relative Strength (RSI) and Moving Average Convergence Divergence (MACD) fell to negative territory while the pair now trades below the 200 and 20-day Simple Moving Averages (SMA).

Support levels to watch: 0.6050,0.6040 and 0.6030 (strong support seen at the beginning of June).
Resistances: 0.6090, 20-day SMA at 0.6138 (former support), 200-day SMA at 0.6158.

NZD/USD Daily chart

NZD/USD

Overview
Today last price	0.6088
Today Daily Change	-0.0075
Today Daily Change %	-1.22
Today daily open	0.6163

Trends
Daily SMA20	0.6135
Daily SMA50	0.6172
Daily SMA100	0.6202
Daily SMA200	0.6158

Levels
Previous Daily High	0.6202
Previous Daily Low	0.6143
Previous Weekly High	0.6237
Previous Weekly Low	0.6116
Previous Monthly High	0.6385
Previous Monthly Low	0.5985
Daily Fibonacci 38.2%	0.6165
Daily Fibonacci 61.8%	0.6179
Daily Pivot Point S1	0.6137
Daily Pivot Point S2	0.6111
Daily Pivot Point S3	0.6078
Daily Pivot Point R1	0.6195
Daily Pivot Point R2	0.6228
Daily Pivot Point R3	0.6254

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

EUR/USD holds steady above 1.1850 in quiet session

EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day holiday.

GBP/USD flat lines near 1.3650 ahead of UK and US data

GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.3650 on Monday. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important data releases from the UK and the US.

Gold corrects lower, tries to stabilize above $5,000

Gold started the week under bearish pressure and declined to the $4,960 area before staging a modest rebound. As trading volumes remain thin with the US financial markets remaining closed on Presidents' Day holiday, XAU/USD looks to stabilize above $5,000 ahead of this week's key data releases.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

Monero Price Forecast: XMR risks a drop below $300 under mounting bearish pressure

Monero (XMR) starts the week under pressure, recording a 4% decline at press time on Monday after a 7% drop the previous day, putting the $300 support zone in focus.