NZD/USD Looking at 0.6503 Support, US Debate on Cards

Justin Freeman
New Zealand coins stacked up

The New Zealand dollar experienced some temporary upturns following the announcement from the Reserve Bank of New Zealand that interest rates will be held firm.  In the immediate aftermath of the announcement, the currency went up a little in its pair with the greenback.

However, this was followed by a challenging few hours for the currency, and it was later spotted down at the $0.6597 level on the price charts.  According to some strategists, the pair is facing a serious chance of its losses becoming greater.  The price charts recently showed a negative candlestick pattern known as a ‘Shooting Star’ at one stage.

The pair’s Relative Strength Index is also showing common signs of a potential dip in value.  In terms of numbers, meanwhile, strategists said that the support range that the pair is currently looking at begins at 0.6503 and ends towards 0.6537.

From there, however, it could go to a lower range beginning at just above 0.63.  In terms of fundamental analysis, Wednesday evening will see a trade balance release from the country, covering the month of August.  However, it is, of course, not just events in New Zealand that could affect the value of this major pair.  Some potentially dollar-moving events are scheduled on the economic calendar for this week and next.  The attention of many traders has now turned to the upcoming US presidential debate between Donald Trump and Joe Biden, which takes place next Tuesday (29th September) in the city of Cleveland.

According to analysts, there are several areas of discussion on the cards – though two, in particular, will be closely followed by the markets.  These are expected to be the coronavirus pandemic and the economy.  Given that the candidates may make implications about the potential direction of government policy in their contributions, there is some potential for volatility.

On Thursday of this week, meanwhile, there will be the standard weekly round of jobs figures from the country.  Continuing claims for the dates around 11th September will be out at 12:30 pm GMT and are due to show a drop.  A drop is also expected for initial jobless claims for the week after.  This metric is due to go from 860,000 to 843,000.

Speeches from senior US financial figures will be placed firmly in the spotlight later on Thursday, with not one but two key addresses on the cards.  Jerome Powell, who chairs the monetary policy-setting Federal Reserve, will speak at 2 pm GMT in front of the US Congress.  At the same time, there will be a speech from Steven Mnuchin, who serves as the US Treasury Secretary.  This is due to take place at 2 pm GMT.

Justin Freeman

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