Nzdusd Bulls Rejoice Rbnz Hawkish Stance

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Nzdusd Bulls Rejoice Rbnz Hawkish Stance

NZD/USD Bulls Rejoice RBNZ Hawkish Stance, But Sellers Remain Strong

During Friday's session, the NZD/USD pair regained some of its lost ground and thus pushed the indicators out of oversold conditions. It all started after New Zealand's central bank gave hawkish comments. At the same time, the DXY index continues to enjoy multi-month highs, which makes things more complicated for the NZD.

The DYX index appears to have consolidated above the 200 SMA as it touched the 103.60 level. These levels were only last seen on 13th June (2 months ago), highlighting that the greenback is really gaining strength.

USD Strength Can't Be Ignored

On the USD front, the FOMC is the main driving force behind the bullish trend which is also helping the US yields as well. At the same time, the Chinese situation is putting a drag on the currencies such as the NZD and the AUD. After all, Evergrande's bankruptcy filing isn't a small issue that can be ignored as it highlights the faults in the Chinese economy.

On the NZD side, the deputy governor of RBNZ is hawkish and highlighted that rates may stay at elevated levels to counter the inflation risk. This caused the NZD to gain some of its lost ground during Friday's session and thus helped it to even become the top performer for the day.

The technical indicators on the NZD/USD daily chair reveal that the market sentiment is bearish or neutral at best as the bulls await a big recovery.

The RSI still continues to print in the oversold territory, which is a sign that buying pressure in the NZD/USD pair may appear any time. Similarly, the MACD is also printing red bars, which continue to weaken over time.

Another scenario is that the NZD/USD is below all of its major moving averages which highlights the control of the bears in this FX pair. So if we take that into account, it highlights that the NZD bulls are at risk.

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