New Zealand Dollar May Keep Falling vs USD as Fed Rate Hike Bets Firm
NZD/USD OUTLOOK – TALKING POINTS:
- New Zealand Dollar drops as Fed rate hike bets swell to start 2022
- Break below 0.68 might pave the way to challenge last year’s low
- US ISM surveys, employment data, FOMC minutes in the spotlight
The New Zealand Dollar suffered the largest one-day loss in two weeks against its US counterpart as markets returned from New Year holiday closures. The return of liquidity marked a potent push higher for the Greenback as Fed rate hike expectations swelled.
For its part, NZD/USD pointedly pushed below congestion area support anchored at 0.6798, seemingly confirming a downside break on a daily closing basis. A subsequent retest of this barrier as resistance seems to be struggling for momentum, bolstering the argument for bearish follow-through.
A relatively minor layer of initial support lines at up 0.6737, followed by the 2021 swing bottom at the 0.67 figure. Alternatively, re-establishing a foothold above the 0.68 mark sees the next layer of resistance capped at 0.6868, with scope for a push above the 0.69 handle thereafter if buyers manage a breach.
The economic data docket offers little from New Zealand this week, keeping the Fed-driven narrative in the spotlight. That will be informed by December editions of manufacturing and service-sector ISM surveys, the closely-watched employment report, and minutes from last month’s fateful FOMC meeting.
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--- Written by Ilya Spivak, Head of Greater Asia at DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.