Yesterday, the NZDUSD pair met strong negative pressure, beginning today with more decline to break 0.7150 level and settles below it, which pushes the price to achieve more expected decline, which targets 0.7050 areas mainly.
The recent downturn in risk appetite that has pushed the Kiwi back towards 0.7150 overlapped with Fed Chair Jerome Powell’s press conference but was not as a result of anything he said or didn’t say. Certainly, he did not really say anything new on the Fed’s new Average Inflation Targeting policy, he repeated that it is too early for the Fed to be talking about tapering its asset purchase program, he played down the idea that the stock market was a bubble (as you would expect him to) and noted that the track of the pandemic are key to the outlook (also as you would expect him too).
Even Though Powell played down the possibility of the stock market being in a bubble, his comments will not have eased the growing concerns of investors over the last few days. Market commentators have attributed Wednesday’s pullback from all-time high levels in the major US indices (and subsequent deterioration in risk appetite that has weighed on NZD) to “over-valuation fears”, as investors observe the circus currently in play as retail investors pump and dump all manner of small-cap stocks (just look at GameStop!).
Therefore, the bearish bias will be expected for today unless breaching 0.7150 – 0.7170 levels and holding above them.
The expected trading range for today is between 0.7070 support and 0.7170 resistance.
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