NZD/USD hovers around 0.6440s post US ADP, ahead of the FOMC By christianborjon NZDUSD Majors Macroeconomics Technical Analysis Fed
by 50-bps and begin its balance sheet reduction. However, at 0.6448, the NZD/USD remains weak, even though the Reserve Bank of New Zealand has hiked rates and has its OCR at 1.50%.Sentiment in the financial markets is negative. Globalremain defensive as investors prepare for the Fed’s 50-bps rate hike, the first larger than 25-bps in 22 years, as the US central bank is trying to bring inflation down.
Geopolitics-wise, the Ukraine-Russia conflict has not shown an improvement in peace talks at all. The hostilities persist as Russia tries to seize the Donbas region in Eastern Ukraine. In the meantime, the greenback is under pressure ahead of the FOMC and losses some 0.12%, sitting at 103.329. Contrarily, the US 10-year Treasury yield tops at 2.981%, almost flat during the day.
Before Wall Street opened, some US economic data crossed the wires. The ADP Employment Change for April, a prelude to Friday’sreport, illustrated that the US economy added 247K jobs, lower than the 395K estimated, while the Balance of Trade for March reported a wider deficit, from $-89 billion to $-109 billion. Regarding the Non-Manufacturing PMIs, the so-called services for April decreased, while the S&P Global Composite Final report decelerated to 56 from 57.7.
Here are some levels to account for at the FOMC monetary policy meeting. The NZD/USD first resistance would be the 100-hour simple moving average at 0.6457. Break above would expose the R1 daily pivot at 0.6470, followed by the August 2020 daily high at 0.6488 and then the R2 pivot point at 0.6500. on the downside, the NZD/USD first support would be the YTD low at 0.6410. A breach of the latter would expose the S1 pivot at 0.
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