The New Zealand dollar fell to erase early profits on Monday, rising 0.2% to 0.5917 $ after falling for two consecutive sessions. This follows last week’s record low and an attempt to move away from it, buoyed by China’s efforts to stimulate economic recovery through affordable housing.
Looking at the performance of the US dollar,
We find that while investors continue to look at Federal Reserve Chairman Jerome Powell’s Jackson Hole speech, the dollar index remained stable around 104 levels on Monday, which is not far from its highest level in more than three months. Powell stated that until inflation falls steadily toward the target, they’re prepared to raise interest rates further if necessary and aim to keep policy tightening. He added that they would ‘proceed cautiously’ with any further increases, citing risks posed by an unexpectedly strong US economy as well as continued work to reduce price pressures. Investors are now looking forward to other economic data later this week, including the US ISM Manufacturing PMI, PCE price index, and the monthly jobs report.
In the meantime,
Markets await the release of New Zealand’s July Building Permits later in the week as well as business confidence data
Technically, the pair has been following a price channel pattern since the beginning of this August, bouncing down with the start of this week’s trading near the upper boundary of the price channel, to also trade below the 20- and 50-day moving averages at their intersection, coinciding with the increasing selling pressure on the momentum indicators for a period of time. 4-hour timeframe, so the pair is likely to incur more losses during the day, targeting support levels around $0.58150 near the lower boundary of that prevailing channel.
