- NZD/USD rose above 0.6200 as the USD held its ground.
- The US reported better-than-expected confidence and housing data ahead of the FOMC decision.
- The announcement of China’s support packages boosted NZD.
On Tuesday, NZD/USD escalated higher, despite USD trading being resilient against most of its peers. Ahead of Wednesday’s decision by the US Federal Reserve (Fed), the US reported robust data that could limit the pair’s gains. On the Kiwi side, the NZD appears to be strengthening following China’s announcement of an economic support package that would benefit the Asian bloc.
Investors assess confidence and housing data ahead of FOMC decision
The US reported solid housing and consumer confidence data for July. The Conference Board reported that individual confidence in economic activity jumped to 117, above expectations of 112 and the previous 109.7. On the other hand, the S&P/Case-Shiller home price index fell, but was weaker than expected, coming in 1.7% in May versus -2.2% expected, while the Federal Housing Agency reported that its home price index rose 0.7% in the same month, beating the 0.2% consensus.
Ahead of the Federal Reserve’s two-day meeting, markets expect a 25 basis point (bps) hike and a data-driven approach by Chairman Powell as a robust economy and tight labor market may prompt the Federal Open Market Committee to consider another hike in September.
Meanwhile, the USD DXY index continued to rise to 101.60 but then retreated towards 101.40, still holding on to gains, while US Treasury yields traded mixed, with the two-year yield slightly down to 4.90%.
NZD/USD levels to watch
The outlook is tilted to the downside, according to the paper, despite the pair recording a two-day winning streak. diagram. The Relative Strength Index (RSI) is below its midline, while the Moving Average Convergence (MACD) is printing rising red bars. However, if the bulls manage to hold above the convergence of the 20 and 100-day simple moving averages (SMA) above 0.6200, further 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.