NZD/USD continues to cycle 0.5880, lacking momentum as broader market focuses elsewhere
- NZD/USD remains trapped as Kiwi bulls seek upside momentum.
- Broader market remains very much a USD game.
- Upcoming Japan data could provide a bump for the Antipodeans if numbers deviate.
The NZD/USD finds itself range-bound as the week continues, trapped between yesterday’s high and low as the US Dollar (USD) refuses to give up ground against most of its major competitors. US Initial Jobless Claims came in better than expected, providing support for the Greenback, and a notable lack of recovery momentum leaves the Antipodeans in a slump after the USD’s bumper start to the week.
US Initial Jobless claims printed at 216K, below the previous period’s 229K, reversing the market’s forecasted increase to 234K. Several speaking notes are expected from members of the Federal Reserve (Fed) over the remainder of the day, and traders will want to keep an eye out for any fresh comments about monetary policy that could shift USD sentiment.
Things are notably light on the Kiwi (NZD) side. During the Asian session, traders will want to keep an eye on upcoming Japanese data that could produce some volatility if the numbers have any surprises. Japan's quarterly Gross Domestic Production figures are expected to show a slight decline; market forecasts are calling for a printing of 1.3%, down from the previous reading of 1.5%.
NZD/USD: 0.5900 is the new resistance
Looking out over the longer-term horizon, the Kiwi is tapping into the lowest prices for the year, touching ten-month lows near 0.5880. Continued selling pressure will see the NZD/USD pair at risk of free-falling to 2022’s lows near 0.5560, and the upside looks resistance-heavy as the NZD has clocked losses against the Greenback for six of the past seven trading weeks.
With the Kiwi’s recent slump to the downside of the sideways channel from the last three weeks, there’s a risk the previous support from 0.5900 could now act as a near-term resistance level.
NZD/USD, 4-hour chart