- NZD/USD remains on track to end the third day lower this week.
- US Dollar Index struggles to rise above 95.
The NZD/USD pair dropped to its lowest level in more than a month at 0.6865 earlier in the NA session and started moving in a tight range after finding a support there. As of writing, the pair was trading at 0.6875, losing 30 pips, or 0.4%, on the day.
Amid a lack of fundamental drivers that could have a significant impact on the trading action in the FX markets, the US Dollar Index fluctuated its recent range below the 95 mark. Nonetheless, the fact that the index hasn’t made a deep correction yet suggests that USD buyers are waiting for the next opportunity to present itself. At the moment, the DXY is virtually unchanged on the day at 94.66.
On Wednesday, the only data from the U.S. showed that existing home sales decreased by 0.4% in May. Meanwhile, speaking at the ECB’s panel today, FOMC Governor Fed Powell reiterated that there was a strong case for gradual rate hikes.
In the early Asian session on Thursday, the Statistics New Zealand is going to release the GDP growth numbers for the first quarter. Experts expect the real-GDP to grow by 0.5% and 2.7% on a quarterly and a yearly basis respectively. A positive reading is likely to help the kiwi show some resilience against the greenback.
Technical outlook
The pair could face the first support at 0.6850 (May 16 low) ahead of 0.6800 (psychological level) and 0.6775 (Nov. 17 low). On the upside, resistances align at 0.6940 (Jun. 19 high), 0.6990/0.7000 (50-DMA/psychological level) and 0.7060 (Jun. 6 high). The RSI indicator on the daily chart remains a little above the 30 mark, suggesting that the pair could edge lower before becoming technically oversold.
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