NZD/USD Tepid As the Week Draws to an End



The pair comes from five consecutive losing weeks, which marks the worst streak in almost two years, as risk-aversion and increasingly hawkish Fed have weighed on it, despite the fact that RBNZ delivered its second rate hike during that period.

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This culminated to fresh 2021 Lows (0.6735) on Tuesday, but it managed to rebound after that, registering a two-day advance, helped by improved sentiment. This gives it the opportunity to pause five-weak losing streak, but this will likely be determined by the reaction to today's US CPI Inflation.

NZD/USD managed to contain the plunge from late-October, before key 0.6702 resistance, which marks the 38.2% Fibonacci of the "Multiyear 2020 Lows/2021 High" rise. As we had indicated in the last analysis, it tested the 0.6800 area and searches for a catalyst that will allow it to look towards the December high (0.6868), but from that level on there are multiple important hurdles.

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The two day-advance though, faltered on Wednesday and the Kiwi keeps soft today, as prior Omicron optimism eased and fears around China's property markets resurfaced after Fitch Ratings downgraded Evergrande and Kaisa to Restricted Default. [1], [2]

The main trend remains down and the pair is in risk of fresh 2021 lows (0.6735) that can open the door to larger decline towards and beyond 0.6702.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.



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