- New Zealand (NZ) Prime Minister Jacinda Ardern announced an easing of the virus-led emergency alert level in Auckland
- NZD/USD pair maintained a narrow trading range of 0.7170 – 0.7080 ahead of the Current Account from Statistics New Zealand the next day.
- Forex trading market participants may sell below the $0.7124 level to target the $0.7082 and $0.7045 levels.
Today in the US trading session, the NZD/USD currency pair failed to stop its early-day bearish rally and remained well offered around $0.7100 during the European session. However, the declining streak was mainly sponsored by the NZ Institute of Economic Research (NZIER). On Monday, the NZD/USD pair maintained a narrow trading range of 0.7170 – 0.7080 ahead of the NZD Current Account from Statistics New Zealand the next day.
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Weaker sentiment data from Australia and the New Zealand Banking Group (ANZ) played a significant role in undermining the pair. On the other hand, the sharp pickup in the US dollar was seen as another critical factor that kept the NZD/USD currency pair down on Monday.
New Zealand (NZ) Prime Minister Jacinda Ardern Remarks
Alternatively, New Zealand (NZ) Prime Minister Jacinda Ardern announced an easing of the virus-led emergency alert level in Auckland. Thus, it could cap further losses for the NZD/USD currency pair. Currently, the NZD/USD currency pair is trading at 0.7109 and consolidating in the range between 0.7170 – 0.7080.
Despite the ever-increasing worries over the fast-spreading Delta variant and fear of a global economic recession, the market’s trading sentiment maintained its previous upbeat environment and remained well bid on the day. This occurred after the S&P 500 futures rose by 0.25% intraday.
While US 10-year Treasury yields were hovering around 1.338% at the time of publication. While the market sentiment was buoyed by optimistic talk about US stimulus and the Sino-American trade dispute resolution. Thus, the prevalent risk-on environment challenges the NZD/USD currency pair.
Quick Economic Data Review
The NZD/USD currency pair reacted to the downward economic revision by the NZ Institute of Economic Research (NZIER). While a weaker sentiment data from Australia and New Zealand Banking Group (ANZ) also put some bearish pressure on the NZD/USD currency pair. As per the latest NZIER projections, the latest community outbreak of COVID-19 is likely to have driven these revisions. That’s because the recent lockdown diminishes economic activity for the coming year. However, the expectation is for a recovery in demand from 2022.
The NZ Institute of Economic Research Inc (NZIER) expects inflation to remain inside the Reserve Bank of New Zealand’s target range of 1-3% before moderating higher towards 2.0% mid-point.
Stronger US dollar Limits NZD/USD Bullish Rally
Furthermore, broad-based US dollar strength has also played a significant role in pushing the pair lower. The broad-based US dollar maintained its early-day bullish streak and was still flashing green during the European session. The gains in the US dollar were being sponsored by expectations that the Fed would start rolling back its massive pandemic-era stimulus sooner rather than later.
The hopes were re-triggered by Friday’s release of the US Producer Price Index, which registered the biggest gain since November 2010 and indicated that higher inflation could persist for some time.
What’s Next – NZD Current Account
Looking ahead, market traders will give their attention to the Chinese macro releases, Australian employment details, and the US monthly retail sales figures. These will play a key role in influencing the NZD/USD pair ahead of the crucial FOMC monetary policy meeting in September 2021.
NZD/USD Price Forecast – Technical Levels
Pivot Point 0.7125
NZD/USD Technical Outlook – Eyes on NZD Current Account
On Monday, the NZD/USD price prediction remains bearish below the 0.7125 pivot point level. In the 4 hour timeframe, the NZD/USD currency pair is trading at 0.7109 and consolidating in the range between 0.7170 and 0.7080.
On the bullish side, the NZD/USD pair is likely to face immediate resistance at 0.7140. It’s extended by 50 periods of EMA (exponential moving average – red line). Furthermore, the breakout of the 0.7140 level is likely to extend further upward trends until the 0.7169 level.
In contrast, the breakout of the 0.7084 level is likely to open additional room for selling until the 0.7024 support level. Moreover, the breakout of the 0.7024 support level is expected to extend the selling trend until the next support level of 0.6970.
In addition to this, the 50-period exponential moving average and the leading indicator, stochastic RSI, suggest a strong selling bias in the NZD/USD currency pair.
Therefore, the Forex trading market participants may sell below the $0.7124 level to target the $0.7082 and $0.7045 levels. Alternatively, traders can take a buying position above the $0.7080 level today. All the best!
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