NZD/USD slides below the 200-DMA and is back below 0.6900
- The NZD/USD slumps 0.98% on broad US dollar strength on Monday.
- Risk appetite remains mixed as China’s Covid-19 outbreak and Russia – Ukraine woes dominate headlines.
- NZD/USD Price Forecast: Upward biased, but once 0.6900 gave way for NZD bears, opened the door for a correction.
After consolidating since the middle of the last week, the New Zealand dollar slides just broke below the 200-day moving average (DMA) amid broad US dollar strength and mixed market sentiment, as shown by US equities. The NZD/USD is trading at 0.6896.
US equities mixed, dollar solid as geopolitical issues and Covid-19 outbreak weighs on mood
US equity indices fluctuate between gainers and losers, while the greenback remains buoyant. The US Dollar Index, a measure of the buck’s value vs. its peers, is up 0.33%, sitting at 99.138, despite that US Treasury yields are falling. Money market futures show that the Federal Reserve would hike 50 bps in its May meeting, underpinning the greenback as month-end flows boost the buck.
Meanwhile, a Covid-19 outbreak in China, particularly in Shanghai, weighed on Asian equities, thus slightly dampening the mood. Russia – Ukraine tussles continue grabbing the headlines, though not shifting the sentiment as initially when the war began.
An absent New Zealand economic docket left the NZD/USD pair adrift to market sentiment ahead of the US open. The US economic docket featured the US Goods Trade Balance for February, which came better than expected, showing a deficit of $106.59B, lower than the $107.57B in the previous reading. Later, the Dallas Fed Manufacturing Index for March rose by 8.7, lower than estimations and trailing February’s 14 number.
NZD/USD Price Forecast: Technical outlook
The NZD/USD broke below the 200-day moving average (DMA) at 0.6909 and slid below the 0.6900 mark. Nevertheless, despite being a “bearish” signal, the NZD/USD is in a correction, following a steeper advance from 0.6740s to just short of the 0.7000 mark.
That said, the NZD/USD’s first support before resuming upwards would be January 13 daily high at 0.6890. Breach of the latter would expose February 23 daily high at 0.6809, followed by the 50-DMA at 0.6746.
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
