- US Dollar Index drops toward 95 on Friday.
- Fed’s Powell Jackson Hole speech weighs on the buck.
- NZD/USD looks to close the week modestly higher.
The NZD/USD pair stretched higher in the NA session and came within a touching distance of the 0.67 as the relatively dovish comments from Fed officials dragged the greenback lower. At the moment, the pair is up 50 pips, or 0.75%, on the day at 0.6690.
Earlier today, speaking to news outlets on the sidelines at the Jackson Hole Symposium, Cleveland Fed President Mester said that there still was a compelling case for further gradual rate hikes and added that Fed Chairman would focus on the short & long-term issues in his opening remarks. On the other hand, St. Louis Fed President Bullard stated that Chairman Powell would be “very careful” in his speech.
In his prepared statement, Chairman Powell said that further gradual rate hikes would be appropriate if the strong growth in income and jobs continued, to adopt a cautious stance. Regarding the inflation outlook, Powell said that there were no clear signs of inflation accelerating above the 2% target rate.
The US Dollar Index, which tracks the greenback against a basket of six major currencies, fell to a 2-day low at 95.03 and was last seen down 0.47% on the day at 95.20.
Technical levels to consider
In case the pair closes ends the day around where it is right now, it will record its second straight weekly close in the positive territory. The pair could face the first technical resistance at 0.6735 (50-DMA), 0.6795/0.6800 (Aug. 2 high/psychological level) and 0.6845 (100-DMA). On the downside, supports are located 0.6620 (daily low/Aug. 23 low), 0.6580 (Aug. 17 low) and 0.6500 (psychological level).
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