Market news

27 December 2021

NZD/USD clings to the 0.6800 despite losing as the last trading week of the year begins

  • The NZD/USD slumps during the day some 0.04%.
  • The New Zealand dollar falls on broad US Dollar strength across the board.
  • The market sentiment is upbeat, despite the first Covid-19 Omicron-related death reported worldwide.
  • NZD/USD Price Forecast: It has a downward bias, but a break below 0.6800 is needed to calm NZD bears.

The New Zealand dollar slides as Wall Street close approaches, trading at 0.6816 at the time of writing. US stock indices reflect the upbeat market mood, despite the spread of the newly discovered strain called Omicron worldwide. In the meantime, New Zealand’s neighbor Australia reported the first Covid-19 Omicron-related death, even though Australia would stick to its reopening plan.

The fall in the New Zealand dollar is linked to broad US dollar strength across the board. The US Dollar index, which measures the greenback’s value against a basket of its rivals, advances some 0.07% up to 96.09, a headwind for the NZD/USD pair, which sheds some of the last week’s gains.
In the meantime, the 10-yeat US Treasury yield sheds one basis point, down to 1.481%.

That said, an absent economic docket, as widely expected as financial markets enter the last week of the year, would keep NZD/USD traders lying on the dynamics of market sentiment, Covid-19 Omicron-related developments, and US fiscal policy pending to be approved by the US Congress.

NZD/USD Price Forecast: Technical outlook

The NZD/USD daily chart shows that the pair has a downward bias. The daily moving averages (DMAs) with a downslope reside above the spot price and would be challenging dynamic resistance levels to overcome.

That said, Monday’s price action is forming a hanging-man candlestick that has bearish implications. Nevertheless, the bottom-wick is a longer one, so NZD bears should be cautious in their attempt to sell the NZD/USD pair because the 0.6800 barrier has been unsuccessfully broken to the downside two previous days.

Nevertheless, the first support on the way south would be the 0.6800 figure. A breach of the latter would expose the December 23 daily low at 0.6795, followed by the December 22 low at 0.6739 and then the December 20 swing low at 0.6702.

 

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