NZD/USD climbs amid mixed market mood, eyes on Powell’s Jackson Hole speech

• US Existing Home Sales drop by -2.2% in July, with "inventory availability" and higher "mortgage rates" cited as reasons.
• Richmond Fed's Manufacturing Index meets expectations with a drop of -7, while the Services Index surprises positively.
• US bond yields show mixed dynamics, but the Greenback continues its ascent with the DXY at 103.588.

NZD/USD recovers some ground though exchanges hands off the highs of the day of 0.5972, trading at 0.5941, amidst a mixed market mood spurred by fears about recent developments in China and uncertainty about the outcome of US Federal Reserve Chair Jerome Powell’s speech at Jackson Hole.

The Kiwi recovers slightly but remains under pressure due to concerns over China and US economic data

US equities dwindle as market sentiment remains fragile. The National Association of Realtors (NAR) revealed that Existing Home Sales plunged -2.2% in July but improved compared to June’s -3.3% figures. According to the report, “inventory availability” and higher “mortgage rates” are the drivers behind the latest report drop, revealed NAR Chief Economist Lawrence Yun.

In other data revealed by the Richmond Fed, the Manufacturing Index plummeted -7 as expected in August, though its Services Index exceeded estimates of a -4 contraction, came at 4.

US bond yields are mixed as the short-end of the curve continues to bull-steepen, while the 10s, 20s, and 30s drop between 0.18 and 0.47 percent. However, the Greenback (USD) continues to rise, with the US Dollar Index (DXY), a measure of the buck’s value vs. six currencies, advancing 0.26%, at 103.588.

Meanwhile, Richmond Fed President Thomas Barkin emphasized that reaching the 2% target is crucial to Fed’s credibility. Later on the day, further, Fed policymakers will cross the wires, with Bowman and Golsbee up next.

On the New Zealand (NZ) front, the lack of economic data keeps traders seeking direction on China’s latest developments and market sentiment. Nevertheless, Retail Sales for the Second Quarter will be revealed on Wednesday, estimated to exceed the prior’s quarter yearly figures, while quarter-on-quarter (QoQ) is foreseen to disappoint investors. Hence, further NZD/USD could be expected.

On the US front, the economic docket would feature Fed speakers, S&P Global PMIs, Durable Good Orders, and New Home Sales.

NZD/USD Price Analysis: Technical outlook

The NZDUSD remains downward biased even though it bounced off year-to-date (YTD) lows of 0.5896. If NZD/USD buyers want to shift the trend to neutral, they must reclaim May 31 daily low turned resistance at 0.5985, followed by the 0.6031 June 8 daily low. Nevertheless, the NZD/USD’s path of least resistance is downwards, and it could test the November 10 daily low of 0.5840, followed by the November 3 swing low of 0.5741.

NZD/USD Daily chart