NZD / USD rises on heightened risk sentiment
New Zealand Dollar, NZD / USD, Wall Street, Crude Oil, NZD Credit Card Spending – Talking Points
Thursday’s Asia-Pacific Forecast
The New Zealand dollar rose overnight against the US dollar, the currency pair’s sixth consecutive daily gain. A moderate risk-taking mood helps the Kiwi Dollar, as well as other risk-sensitive currencies. Wall Street traders remained bullish on stocks during Wednesday’s New York session. The safe-haven dollar fell, with the USD DXY index falling nearly 0.20% in APAC trading.
A decline in short-term Treasury yields helps push the US dollar down despite bets on the Federal Reserve’s rate hike, which continue to rise as traders assess stiffer inflation alongside economic growth as Covid restrictions are lifted across the world. The yield on the 2-year note fell for a second day, moving away from its highest level since March 2020.
Crude oil prices are on the rise after the Energy Information Administration (EIA) announced a surprise draw of 431,000 barrels in crude oil inventories overnight. Analysts were expecting construction of nearly 2 million barrels for the week ending October 15. Inventories at Cushing, Oklahoma – the U.S. oil delivery point – fell more than 2 million barrels in one of the biggest draws of the year.
Today, Japanese foreign bond investment data for the week ending October 16 will cross threads. Credit card spending in New Zealand (September) will drop at 02:00 GMT. This print will offer a glimpse into the spending patterns of the Kiwi economy after the lockdowns in Auckland eased. RBNZ bets have risen sharply recently, pushing the Kiwi dollar higher. The RBNZ is expected to initiate a second rate hike next month at a rate of 25 basis points.
Technical forecast NZD / USD
The NZD / USD hits the highest levels traded since early June. However, prices may have run too far too fast, with the Relative Strength Index (RSI) showing an overbought signal above the 70 level. The psychologically imposing level of 0.7200 also appears to offer some degree of overbought. resistance.
A withdrawal can be on the charts, perhaps at the 9 day exponential moving average (EMA). Otherwise, the bulls could continue to push prices higher, with the aim of firming prices above the aforementioned 0.72 handful.
NZD / USD Daily Chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
Contact Thomas, use the comments section below or @FxWestwateron Twitter