Ella 
NZD/USD continued to move higher in Asia on Thursday, building on an overnight rebound from below the 0.6000 psychological mark and gaining strong positive momentum. Fresh selling in the U.S. dollar pushed NZD/USD back to around 0.6000 as of late.
The U.S. Dollar Index (DXY), which tracks the greenback against a basket of currencies, has encountered resistance near the 100-day simple moving average (SMA) and now appears to have halted a two-day rally that began at its lowest levels since August 31. Better-than-expected U.S. labor market data released on Wednesday and rising consumer inflation expectations did give the dollar a good boost, but the Fed’s dovish outlook prevented further gains.
In fact, the market has completely ruled out the possibility of further interest rate hikes by the Federal Reserve, and believes that the probability of the Federal Reserve cutting interest rates by May 2024 is more than 50%. This triggered a new round of declines in US bond yields, which, coupled with stable stock market performance, suppressed the status of safe-haven currencies and benefited risk assets NZD/USD. That said, thin liquidity against the backdrop of the US Thanksgiving holiday may prevent bulls from placing new bets on NZD/USD.
Even from a technical perspective, if NZD/USD encounters resistance this week at the 200-day simple moving average (SMA), it is a further reminder that we should remain cautious before entering into positions for the continuation of the appreciating move. In the absence of relevant market economic data, US dollar fluctuations will continue to play a key role in the NZD/USD currency pair. Next, market focus will turn to New Zealand’s quarterly retail sales data due on Friday, as well as the U.S. Purchasing Managers’ Index to be released later in the U.S. session.
