NZD/USD bulls step in at an hourly 50% mean reversion area
- NZD/USD firms despite US dollar strength at start of week.
- NZD/USD is shaping up for a bullish move to hourly resistance.
- Coronavirus delta risks are being watched closely by analysts.
NZD/USD has been firm within a 0.7000/0.7030 range at the start of the week despite the US yields moving higher and the greenback being taken along for the ride.
The US benchmark 10-year Treasury yields hit a three-month high of 1.515%. The dollar index, DXY, which measures the US currency against six major rivals, rose 0.33% to 93.490 the high on the day.
Analysts have eyes on Delta risk
”This week is a relatively quiet one on the local data front, with confidence surveys the highlight. But they tend not to influence the FX market too much from month to month, leaving the Delta outbreak (and its long tail) at front and centre,” analysts at ANZ Bank said,
”Markets are treating the next 3 RBNZ OCR decisions (hikes) as a done deal. We don’t see it that way,” the analysts added.
”To be sure we expect and are forecasting hikes, but if lockdowns persist the outlook could take a turn for the worse, and markets don’t seem to be acknowledging that possibility (which would likely be NZD-negative).”
NZD/USD technical analysis
Meanwhile, an interesting development has taken place on the hourly time frame as follows:
The price formed a W-formation and the neckline has been retested already, holding the supply at the 50% mean reversion level which could equate to a bullish rally in the coming session.
