NZD/USD trading at its lowest in two weeks

It was not a good start to the week for the New Zealand currency, as it weakened sharply against its American rival. NZD/USD fell to 0.6913 on Monday and trades at around 0.6220 ahead of Tuesday's opening. The Kiwi lost the most during European trading hours despite financial markets in the Old Continent remaining closed due to the Easter Monday Holiday.

The main market driver at the beginning of the week was the Japanese yen, which edged lower following comments from the new Bank of Japan Governor, Kazuo Ueda, replacing Haruhiko Kuroda.

Among other things, Ueda said that he has agreed with Prime Minister Fumio Kishida that there is no immediate need to change the 2013 joint statement with the government. Furthermore, he noted that a small rate hike would not be a big issue for the financial system, quite relevant after a decade of ultra-loose monetary tightening in the country.

The US Dollar benefited from JPY's broad weakness and speculation that most major central banks will soon hit the pause bottom amid the increased risk of a global recession. Central banks had started retrieving monetary support in 2022 to tame inflation, and most of them stand halfway towards their goals. Still, continued tightening has resulted in a banking crisis, while growth has turned sluggish.

Technical Outlook

NZD/USD daily chart offers a neutral stance, although the risk of a bearish continuation has increased. It trades between directionless moving averages, with the 100 SMA providing resistance around 0.6300 and the 200 SMA acting as dynamic support at 0.6160. At the same time, the pair seesaws around an also flat 20 SMA, aiming to end the day below it. Finally, technical indicators hover around their midlines with uneven downward strength, in line with another leg south.