- The Kiwi is following the broader market into the downside against the US Dollar.
- Risk aversion is the name of the game for Monday as the DXY extends its climb.
- Kiwi traders will be looking ahead to Wednesday’s rate call from the RBNZ.
The NZD/USD is backsliding for Monday, falling around fifty pips and facing rejection from the 0.6000 major handle as risk-off flows drive the Greenback (USD) higher across the board.
The Kiwi peaked last Friday at 0.6050 before getting knocked back as market risk appetite evaporates, extending risk asset declines against the US Dollar. Fears of a global recession, hawkish comments from Federal Reserve (Fed) officials, and climbing US Treasury yields are all intertwining to send the Greenback higher across the board.
NZD traders will be looking ahead to Wednesday’s latest rate call and monetary policy statement from the Reserve Bank of New Zealand (RBNZ); with the RBNZ broadly expected to hold rates steady at 5.5%, traders will be focusing on the RBNZ’s statement to glean any hints about the future of the rate hike cycle moving forward.
NZD/USD technical outlook
The Kiwi’s decline for Monday sees the NZD/USD pair slipping into the bearish side of the 200-hour Simple Moving Average (SMA). The pair is down over a hundred pips from Friday’s top at 0.6050, leaving the NZD/USD down 1.7% and set for a bearish tip into last week’s bottom near 0.5900.
Daily candlesticks have the NZD/USD hung up on the 34-day Exponential Moving Average, with technical resistance from the 100-day SMA near 0.6075.
A sustained bear run will see the pair set to challenge 2023’s lows of 0.5510, while a bullish reversal will need to overcome the 200-day SMA currently parked just below the 0.6200 handle.