FxWirePro: NZD/USD on the back foot as Omicron fears escalate, yields stay pressured

Chart - Courtesy Trading View 

Spot Analysis:

NZD/USD was trading 0.21% lower on the day at 0.6737 at around 03:40 GMT

Previous Week's High/ Low: 0.6823/ 0.6736

Previous Session's High/ Low: 0.6801/ 0.6745 

Fundamental Overview:

Market sentiment sours amid multiple negatives concerning the Omicron COVID-19 variant.

Geopolitical fears and cautious mood before critical central bank monetary policy meetings keep antipodeans depressed.

The Asian Development Bank (ADB) on Tuesday trimmed its growth forecasts for developing Asia for this year and next to reflect risks and uncertainty brought on by the new Omicron coronavirus variant.

Focus on US Producer Price Index (PPI) for November. PPI is expected at 9.2% YoY versus 8.6% in the prior month.

Technical Analysis:

- NZD/USD resumes downside after brief pause in the previous week

- The major has slipped below 200-week MA, close below will open downside

- Momentum is bearish and volatility is high, price action is below major moving averages

- GMMA indicator shows major and minor moving averages are strongly bearish

Major Support and Resistance Levels:

Support - 0.6702 (38.2% Fib), Resistance - 0.6776 (5-DMA)

Summary: NZD/USD was trading with a strong bearish bias. Scope for test of 38.2% Fib at 0.6702.