NZD/USD refrains from providing any gaps, taking rounds to 0.6800, as traders turn cautious ahead of the key central bank decisions scheduled for the week.

The kiwi pair cheered risk-on mood the previous day even as the US Consumer Price Index (CPI) flashed a fresh 39-year high. The reason could be linked to the inflation gauge’s matching of the broad consensus, which rejected fears of an unusually high price pressure than forecasted. That said, the US CPI matched expectations of 6.8% YoY, versus 6.2% prior, for November.

Also helping the NZD/USD prices were stable inflation expectations revealed via the University of Michigan Consumer Sentiment Index, to 70.4 for December.

However, fears emanating from the South African covid variant, dubbed as Omicron, joined escalating US-China tussles to weigh on the NZD/USD prices. Also exerting downside pressure on the quote were the talks surrounding the likely shrink in the carry trade due to the Reserve Bank of New Zealand’s (RBNZ) recently less hawkish comments and the Fed rate hike woes.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Despite snapping a five-week downtrend, NZD/USD is yet to overcome a descending resistance line from early November amid sluggish RSI. However, the MACD lines tease bullish cross and keep buyers hopeful to break the 0.6800 hurdle.

That said, a horizontal area from late September, around 0.6860-70 will act as an additional filter before directing buyers to the 0.6980 resistance comprising multiple levels marked in the last 11 weeks.

Meanwhile, a sustained downtrend could initially aim for the yearly low surrounding 0.6735 before challenging the 0.6700 threshold.

Kiwi Struggles to Conquer 0.6800 Region

Dec 13 2021

Stop Loss -1.65%

Holding time 42d22hr

0.67310

Entry price

0.66200

Stop loss price

1