- NZD/USD recovers from 0.6250 as the US Dollar turns sideways ahead of FOMC minutes.
- The likelihood of an interest rate cut by the Fed in March 2024 has dropped slightly.
- NZD/USD manages to sustain inside the Rising Channel chart pattern.
The NZD/USD pair has rebounded after discovering buying support near 0.6250 on Wednesday. The Kiwi asset finds cushion as the US Dollar Index (DXY) is struggling for a direction ahead of the release of the Manufacturing PMI for December to be reported by the United States Institute of Supply Management (ISM) at 15:00 GMT and the Federal Open Market Committee (FOMC) minutes.
S&P500 futures remains subdued in the Asian session, portraying caution among market participants ahead of crucial US economic events. The USD Index consolidates around 102.20 after a sharp recovery as investors reconsider about risk sentiment.
Bets supporting an interest rate cut by 25 basis points (bps) by the Federal Reserve (Fed) in March 2024 have dropped. As per the CME Fedwatch tool, the likelihood of an interest rate cut in March has come down to 67% from 72% projected on Tuesday.
NZD/USD trades in a Rising Channel chart pattern on a four-hour scale in which each pullback is considered as a selling opportunity by the market participants. The Kiwi asset slips below the 50-period Exponential Moving Average (EMA), which indicates that the near-term upside bias has dampened for now. The broader appeal will remain bullish until the asset sustains in the upward-sloping channel.
The Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00. Fresh recovery would appear when the momentum oscillator will deliver a range shift move.
Investors should capitalize a mean-reversion move to near the lower portion of the aforementioned chart pattern, which is around 0.6235. This would result in a recovery move towards 13 December 2023 high at 0.6287, followed by January 2 high at 0.6335.
In an alternate scenario, a breakdown below December 18 low near 0.6200 would expose the asset to 12 December 2023 high at 0.6170 and 8 December 2023 low near 0.6100.
NZD/USD four-hour chart
-638398659413830379.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD struggles below 0.6400; focus remains on FOMC meeting
AUD/USD stays defensive below 0.6400 early Tuesday, lacking bullish conviction. China's economic woes, US-China trade war fears and the RBA's dovish shift continue to act as a headwind for the Aussie. The pair fails to draw support from a weaker US Dollar ahead of Retail Sales data.
USD/JPY: Volatile within range near 154.00 ahead of US Retail Sales data
USD/JPY is moving back and forth in a range at around 154.00 in the Asian session on Tuesday. The pair feels the weight of the Japanese commnetary and a softer risk tone. Howevrer, a renewed US Dollar uptick keeps the dowside checked ahead of the US November Retail Sales report.
Gold struggle with key $2,650 level extends ahead of US Retail Sales data
Gold price holds the previous rebound above $2,650 early Tuesday as buyers remain in control amid sustained weakness in the US Dollar and sluggish US Treasury bond yields. The focus now remains on the US Retail Sales data as the US Federal Reserve begins its two-day monetary policy meeting later on Tuesday.
Ripple's XRP could rally to $4.75 as RLUSD set to officially launch on Tuesday
Ripple confirmed in a press release on Monday that its RLUSD stablecoin will officially launch on Tuesday across exchanges, including MoonPay, Uphold, CoinMENA, Bitso and ArchaxEx.
Five fundamentals for the week: Fed dominates the last full and busy trading week of the year Premium
Christmas is coming – but there's a high likelihood of wild price action before the holiday season begins. Central banks take center stage, and there is enough data to keep traders busy outside these critical decisions.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.