NZD/USD shedding chart space, testing 2023 lows for the year near 0.5850

Share:

• The NZD/USD is trading into the floor, inches away from setting a new low for 2023 below 0.5846.
• Market sentiment has receded as investors see jitters over geopolitical tensions.
• Markets looking ahead to Fed Powell appearance later on Thursday, followed by NZ Trade Balance figures.

The NZD/USD slipped even further on Wednesday, declining into 2023’s lows and set for a new yearly low below 0.5846.

Broad-market sentiment turned firmly risk-off on the trading day, and the Kiwi heads into the Thursday market session pinned to the floorboards.

The Gaza Strip conflict between Israel and Hamas continues to weigh on geopolitical stability concerns for the Middle East, with market tensions rising after a hospital explosion left over 500 civilians dead. Both Israel and Hamas have pointed fingers at the other, with Hamas claiming an Israeli targeted air strike demolished the building while Israel is blaming an errant Hamas missile.

The US Congress remains frozen in place, unable to elect a new Speaker of the House after Congressional Republicans ejected their own Speaker from the position. Congress has faced down to unsuccessful votes in two days trying to find a replacement, log-jamming government procedure and rattling investors with the US set to run into another funding standoff in four weeks.

Thursday brings US Initial Jobless Claims for the week into October 13th, and markets are expecting to see a small uptick in the number of new unemployment applicants, from 209K to 212K.

Later in the day Federal Reserve (Fed) Chair Jerome Powell will be delivering talking points at a luncheon hosted by the Economic Club of New York, and late Thursday will see New Zealand Trade Balance figures as NZ heads into the Friday early market session.

Kiwi investors will be hoping for an improvement in the headline Trade Balance for the annualized period into September, which last showed a $-15.54B undershoot in August.\

NZD/USD Technical Outlook

The Kiwi remains woefully underbid, testing into 2023’s lows and set for a break of the year’s bottom bids, and Kiwi price action continues to follow a declining 50-day Simple Moving Average (SMA) further down the charts.

A bearish continuation into fresh lows for the year will see the way open up for an extended decline into 2022’s lows far below at 0.5511, while a bullish recovery will still face long-term technical resistance from the 200-day SMA currently rolling over into bearish acceleration from 0.6152.

NZD/USD Daily Chart

NZD/USD Technical Levels