News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfV5wS6 https://t.co/Iw9haaHAnn
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sr63f https://t.co/raO3gCGqQ6
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/rWVlBs6H3c
  • The update to the US Consumer Price Index (CPI) is likely to sway the US Dollar during the Federal Reserve’s blackout period as the central bank braces for a transitory rise in inflation. Get your weekly $USD forecast from @DavidJSong here: https://t.co/JTuP7CLlyi https://t.co/tOvqn3Gdpc
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/s5dn4ZKnku
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACyvdZ https://t.co/6VjW5FEiQW
  • Global stocks bounce back from recent pullback as key resistance levels lie ahead. Get your weekly equities forecast from @HathornSabin here: https://t.co/wXSWo1JygD https://t.co/vWVaSEQTXT
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/9kfBu04auM
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5ddzFV https://t.co/8GJ6OQYgnW
  • Bitcoin (BTC) started the day on the front foot on the Twitter news before the latest China crypto ban hammered the market lower. Get your weekly crypto forecast from @nickcawley1 here: https://t.co/ZKHGXeVhsR https://t.co/QSltMQml6N
New Zealand Dollar Analysis: NZD/USD Weakens on Broader Risk Aversion

New Zealand Dollar Analysis: NZD/USD Weakens on Broader Risk Aversion

Thomas Westwater, Analyst

New Zealand Dollar, NZD/USD, Covid, UK Travel– Talking Points

  • Wall Street trades lower as investors digest new Covid-related restrictions
  • NZD/USD sees biggest daily loss since October as risk aversion rises
  • Light economic data prints in the week ahead leave Covid in spotlight
Advertisement

Covid is back in the spotlight for traders after a new variant, one that is perhaps more contagious, was identified in the United Kingdom. Researchers are still analyzing the possible mutation, but preliminary estimates are showing it to be nearly 70% more transmissible. South Africa is also seeing a possible mutation of Covid, separate from the UK’s strain. The emergence has caused a flurry of new travel restrictions from both countries.

The US Dollar rose in reaction, while Treasury yields fell as investors shifted to the traditional safe-haven assets. Meanwhile, U.S. equities sold off on Wall Street during Tuesday’s session with the Dow Jones and S&P 500 dropping 0.67% and 0.21%, respectively. The 10-year Treasury yield fell to 0.92% while the US Dollar (DXY) climbed 0.63%. The Greenback is still near multi-month lows, however.

US Dollar, 10-Year Treasury Yield, Nasdaq 100 - Daily Chart

10 year yield vs US Dollar chart

Chart created with TradingView

Wednesday’s Asia-Pacific Outlook

The New Zealand Dollar reflected the risk-off mood with NZD/USD dropping 0.80% on Tuesday as US Dollar inflows damaged recent gains in the pair. Still, the Kiwi remains higher versus the Greenback for December, but another day of weakness similar to Tuesday would bring NZD/USD to a negative stance for the month.

Given the lack of economic events on the docket, and combined with the Christmas holiday where many markets will be closed, risk trends will likely be dictated by the ongoing Covid situation, particularly the new strains in the UK and South Africa. However, France recently announced that it will re-open its border to essential travelers who have had a negative Covid test recently.

NZD/USD Technical Forecast:

NZD/USD’s recent weakness has dented some of the gains since October, but the overall bullishness likely remains intact above the 0.7000 psychological level. Bears scored a short-term victory by breaching the 20-day Simple Moving Average, but the longer-term 50-, 100-, and 200-day SMA’s still suggest that the broader trend remains biased higher.

The 23.6% Fibonacci retracement level from the August to December major move also appears to be offering recent support at 0.7010 which has stood several times this month. A break below would likely fuel bearish action. Coupled with a recent bearish MACD crossover, the 23.6% Fib retracement may likely be tested soon.

NZD/USD Daily Chart

NZD/USD Chart

Chart created with TradingView

NZD/USD TRADING RESOURCES

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwateron Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES