- NZD/USD juggles around 0.5980 after a corrective move, propelled by a risk-off impulse.
- The US Dollar Index recovers to near 106.53 as investors shift focus to the inflation data for September.
- NZD/USD trades in a 0.5840-0.6050 range from the past two months, indicating a sheer volatility squeeze.
The NZD/USD pair turns sideways below the psychological resistance of 0.6000 as tensions deepening in the Middle East over the Israel-Hamas crisis have dampened market sentiment. The Kiwi asset drops to near 0.5980 as investors rush to safe-haven assets. It is worth noting that a sell-off in the Asia-Pacific currencies is slower against selling pressure in Europe.
The appeal for the US Dollar improves significantly due to the risk-off impulse propelled by Israel-Hamas tensions and rising odds of one more interest rate increase from the Federal Reserve (Fed) prompted by strong labor demand.
The US Dollar Index (DXY) recovers to near 106.53 and is expected to extend upside as investors shift focus to the Consumer Price Index (CPI) data for September, which will be published on Thursday. The core CPI that strips off volatile food and oil prices is seen growing at a steady pace of 0.3%.
NZD/USD trades in a 0.5840-0.6050 range from the past two months, indicating a sheer volatility squeeze. A prolonged consolidation is generally followed by wider ticks and heavy volume after a volatility explosion.
The Kiwi asset remains sticky with the 20-period Exponential Moving Average (EMA) around 0.5960, portraying a sideways performance.
Meanwhile, the Relative Strength Index (RSI) (14) hovers near 60.00. A breakout above the same would activate the bullish impulse.
Going forward, a decisive break above the psychological resistance of 0.6000 would drive the major toward September 29 high around 0.6050. A breach of the latter would send the major toward August 09 high at 0.6096
On the flip side, a breakdown below the round-level support of 0.5900 would drag the major toward September 7 low at 0.5847. A slippage below the latter would expose the asset to the round-level support at 0.5800.
NZD/USD four-hour chart
-638324521918506844.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
EUR/USD stabilizes near 1.0500, looks to post weekly losses
EUR/USD extended its daily decline toward 1.0500 in the second half of the American session, pressured by the souring market mood. Despite the bullish action seen earlier in the week, the pair remains on track to register weekly losses.
GBP/USD falls below 1.2150 as USD rebounds
Following an earlier recovery attempt, GBP/USD turned south and declined below 1.2100 in the second half of the day on Friday. The negative shift seen in risk mood amid rising geopolitical tensions helps the US Dollar outperform its rivals and hurts the pair.
Gold advances to fresh multi-week highs above $1,920
Gold extended its daily rally and climbed above $1,920 for the first time in over two weeks on Friday. Escalating geopolitical tensions ahead of the weekend weigh on T-bond yields and provide a boost to XAU/USD, which remains on track to gain nearly 5% this week.
Bitcoin could be an alternative to US-listed companies but not in the short term
Bitcoin has dipped below $27,000, adding to the subdued cryptocurrency market sentiment. While short-term price concerns persist, analysts predict a rebound based on historical figures.
Nvidia Stock Forecast: NVDA slips as Biden administration attempts to close AI chip loophole
Nvida's stock price opened marginally lower on Friday after Reuters reported that the Biden administration is attempting to close a loophole that allowed Chinese companies access to state-of-the-art computer chips used for AI.