NZD/USD pullback eyes 0.6800 amid mixed concerns over Ukraine, retreat in commodities

• NZD/USD refreshed 15-week high before reversing from 200-DMA, stays pressured of late.
• Risk-aversion continues even as EU’s resistance in banning Russian oil imports, Ukraine human corridor restart tame pessimism.
• Yields rebound, commodities ease from multi-year high but USD remains firmer.
• No major data/events on the calendar, risk catalysts to remain as the key.

NZD/USD tracks profit-booking in commodities while easing towards the 0.6800 threshold, around 0.6825 during the early Tuesday morning in Asia. The kiwi pair rallied to the highest since late November before reversing from 0.6926 the previous day.

That said, prices of commodities rallied the previous day as risks to the global supply chain emanating from Ukraine-Russia tussles escalated as the US intends to go ahead with banning Moscow’s oil. However, a lack of support from the European Union (EU) and emphasis on other means to punish Russia seems to have triggered the profit-booking mood afterward.

On the same line was a halt in Russian fire in selected Ukrainian cities, as well as a restart of the human corridor after a two-day break.

Even so, “Ukrainian officials said a Russian airstrike hit a bread factory in northern Ukraine on Monday, killing at least 13 civilians, while talks between Kyiv and Moscow made little progress towards easing the conflict,” said Reuters.

Gold rallied to a 19-month high whereas WTI crude oil rallied to the levels last seen during 2008 before the latest pullback.

Against this backdrop, Wall Street closed in the red while the US 10-year Treasury yields recovered by the end of Monday’s North American session.

Elsewhere, upbeat China’s trade numbers for February and an upward revision to the RBNZ rate-hike forecasts by the ANZ also favored NZD/USD bulls. That said, the ANZ now expects 3.5% OCR by April 2023 versus 3.0% previous estimation. The bank also estimates a 0.50% consecutive rate-lift by the RBNZ during April and May.

Moving on, a rebound in the yields may test the NZD/USD prices but firmer commodities and the latest ANZ forecasts can keep the buyers hopeful.

Technical analysis

A U-turn from 200-DMA and daily closing below the 100-DMA, respectively around 0.6930 and 0.6840, directs NZD/USD prices towards multiple tops marked since late January around 0.6810. However, the kiwi pair buyers remain hopeful beyond a three-week-old rising trend line, near 0.6700 by the press time.