FxWirePro: NZD/USD refreshes monthly lows, outlook bearish

NZD/USD chart - Trading View 

Spot Analysis:

NZD/USD was trading 0.05% lower on the day at 0.6950 at around 08:10 GMT

Previous Week's High/ Low: 0.7093/ 0.6981

Previous Session's High/ Low: 0.7027/ 0.6942

Fundamental Overview:

Broad-based US dollar strength weighs on the pair. U.S. Treasury yields slightly eased, but held close to a 7-week trough.

Growing expectations of a earlier-than-expected U.S. rate hike, pushing the dollar to a multi-month highs. DXY has eased slightly from multi-month highs at 93.88, but upside bias intact.

St. Louis Federal Reserve President James Bullard on Tuesday cautioned high inflation may require more aggressive steps by the central bank, including two interest rate hikes in 2022.

Fed Chair Jerome Powell in his testimony before the U.S. Senate Banking Committee on Tuesday said the U.S. economy is still far from achieving maximum employment, a key criteria for rate hikes.

Technical Analysis:

- NZD/USD dives lower in Sloping Channel pattern

- Momentum is bearish, Stochs and RSI are biased lower

- Volatility is high as evidenced by widening Bollinger bands

- GMMA indicator shows major trend is neutral, while minor trend is strongly bearish

Major Support and Resistance Levels:

Support - 0.6936 (Cloud base), Resistance - 0.6970 (55-week EMA)

Summary: NZD/USD trades with a bearish bias. Break below daily cloud will drag the pair lower. Next bear target lies at 110-week EMA at 0.6863.