NZD/USD stops the bleeding, recovering towards 0.5850

The NZD/USD consolidated losses and rose nearly 0.40% to 0.5850.
Markets will remain calm on Monday with no relevant highlights on the economic calendar.
US economic activity data, including S&P PMIs from October, Q3 GDP and PCE inflation from September figures, will be the week’s highlight.

At the beginning of the week, the NZD/USD increased towards 0.5850, as the pair seems to be facing a period of consolidation after losing more than 1% last week. All eyes are now on high-tier US data this week, including Tuesday’s Manufacturing PMI, the Gross Domestic Product (GDP) preliminary estimate from Q3 on Thursday, and Personal Consumption Expenditures (PCE) from September on Friday. On the Kiwi’s side, Housing data, including Building Permits from September, is due on Tuesday’s Asian session.

In the meantime, the USD seems to be struggling to gather momentum due to markets betting on a less aggressive Federal Reserve (Fed) after Chair Powell’s speech last week. He highlighted that the high bond yields will be considered and that the bank will proceed “carefully” regarding the next decisions. In line with that, according to the CME FedWatch tool, the odds of a 25 bps hike in the December meeting remain low and stand around 30%, making the green currency lose interest. However, high-tier economic figures released this week will continue shaping the expectations on the Fed’s next steps and set the pace of the USD’s price dynamics in the next sessions.

NZD/USD Levels to watch

Considering the daily chart, NZD/USD presents a neutral to bearish outlook, as, despite the bears having recently gained significant momentum, the may take a step back to consolidate the latest movements before the next downward leg as indicators have turned somewhat flat in negative territory.

The Relative Strength Index (RSI) indicates a neutral stance below its midline, displaying a flat slope, while the Moving Average Convergence (MACD) shows stagnant red bars. Additionally, the pair is below the 20, 100, and 200-day Simple Moving Average (SMA) suggesting that the bears are in a favourable position on the broader scale.

Support levels: 0.5820,0.5800,0.5770.

Resistance levels: 0.5890,0.5900,0.5930 (200-day SMA).