- The NZD/USD rose above 0.6200 despite the USD holding its foot.
- The US reported better-than-expected Confidence and Housing data ahead of the FOMC decision.
- China’s support package policies announcements boosted the NZD.
On Tuesday, the NZD/USD escalated higher despite the USD trading resilient against most of its partners. Ahead of Wednesday’s Federal Reserve (Fed) decision, the US reported robust data which could limit the pair’s upside. On the Kiwi’s side, the NZD seem to be strengthening on the Chinese announcement of an economic support package that would benefit the Asian block.
Investors assess Confidence and Housing data ahead of FOMC decision
The US reported solid Housing and Consumer Confidence data from July. The Conference Board reported that individuals’ confidence in economic activity jumped to 117, above the expected 112 and the previous 109.7. On the other hand, the S&P/Case-Shiller Home Price Index dropped but was lower than expected in May, coming falling by 1.7% vs -2.2% expected, while the Federal Housing Agency reported that its Housing Price Index increased by 0.7% in the same month, beating the consensus of 0.2%.
Ahead of the Federal Reserve (Fed) two-day meeting, markets await a 25 basis point (bps) hike and data-dependant approach by Chair Powell, as a robust economy and a tight labour market may make the Federal Open Market Committee consider another hike in September.
In the meantime, the USD DXY Index continued to rise to 101.60 but then retreated towards 101.40, still holding gains while US Treasury yields traded mixed, with the 2-year rate slightly decreased to 4.90%.
NZD/USD Levels to watch
The outlook is tilted to the downside despite the pair tallying a two-day winning strike, according to the daily chart. The Relative Strength Index (RSI) stands below its midline while the Moving Average Convergence (MACD) prints rising red bars. However, if the bulls manage to hold above the 20 and 100-day Simple Moving Average (SMA) convergence above 0.6200, more upside may be on the horizon.
Resistance levels: 0.6230, 0.6250, 0.6270.
Support levels: 0.6200, 0.6190 (100-day SMA), 0.6150.
NZD/USD Daily chart