NZD/USD: 61.8% Fib retracement is proving a tough nut to crack

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  • Kiwi picked up a bid earlier today after the release of a better-than-expected third quarter (Q3) New Zealand inflation figure.
  • New Zealand bond yields rallied, indicating receding dovish RBNZ expectations.
  • Still, the NZD/USD pair failed to take out resistance at 0.6594  – which is 61.8 percent Fib retracement of 0.6699/0.6424.

Currently, the NZD/USD pair is trading at 0.6579, having clocked a high of 0.6595 earlier today.

The bid tone around the Kiwi dollar strengthened in early Asia after the New Zealand’s Q3 consumer price index (CPI) came in at 0.9 percent quarter-on-quarter, beating the estimated rise to 0.7 percent from the previous quarter’s print of 0.4 percent.

The 10-year New Zealand government bond yield rose almost four basis points to 2.705 percent, the highest level since September 27, signaling receding dovish RBNZ monetary policy expectations.

However, despite an above-forecast CPI and a rise in NZ bond yields, the NZD/USD pair failed to penetrate 0.6594 – 61.8 percent Fib hurdle.

That said, the key hurdle could be scaled if the RBNZ’s sectoral price gauge, due later today, beats estimates, adding to the bullish pressure around the NZD.

NZD/USD Technical Levels

Resistance: 0.6594 (61.8 percent Fib R of 0.6699/0.6424), 0.6608 (50-day EMA), 0.6616 (Trendline falling from April highs)

Support: 0.6544 (Aug. 15 low), 0.6500 (Sept. 11 low), 0.6442 (Oct. 10 low)

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