NZD/USD struggles at 0.6800 as Ukraine-Russia eye the third round of negotiations

• The New Zealand dollar advances 2.05% in the week.
• Financial sentiment improved as Ukraine/Russia negotiators agreed to create a corridor for evacuation while scheduling another round of discussions.
• NZD7USD Technical Outlook: A daily close above 0.6810 would shift the pair’s bias to neutral-downward.

NZD/USD barely advances, and its two-day rally seems to falter as Thursday’s price action forms a “doji” after reaching a weekly top around February 23 high at 0.6809. In the middle of a mixed market mood, the NZD/USD is trading at 0.6802.

Market mood improved on positive news on Ukraine-Russia meeting

Wall Street jumped on the back of tilted positive news of the Russia-Ukraine second round of talks. A Ukrainian negotiator said that both parties agreed to have a third round of negotiations, while Russia-Ukraine agreed on creating corridors for evacuating civilians. Furthermore, he noted that the agreement involved a “possible” temporary ceasefire during that event. On the Russian front, the negotiator commented that they discussed future political regulation of the conflict between the parties and agreed to support humanitarian corridors.

Meanwhile, the Federal Reserve will move forward with plans to raise interest rates this month to tame inflation, even as the outbreak of war in Ukraine has made the outlook “highly uncertain,” Fed Chair Jerome Powell said on Wednesday. Powell noted that due to geopolitical concerns, he would open the door to the possibility that the rate hike will be only 25 basis points versus 50 basis points.

In the meantime, the US Dollar Index (DXY), a gauge of the greenback values against six major currencies, reached a high at 97.95, up so far 0.48%, while US Treasury yields are almost flat, led by the 10-year US T-note yield at 1.856%.

Elsewhere, data-wise, on Wednesday, the NZ economic docket was absent. Across the pond, the US economic docket reported that Initial Jobless Claims for the previous week fell more than forecasted as market players prepare for Friday’s Nonfarm payrolls report, which estimates that the US added 415K jobs in February.

NZD/USD Price Forecast: Technical outlook

Thursday’s price action denotes that the pair is subdued, almost flat in the day. Of late, the NZD/USD pair reclaimed the 0.6800 mark, though the uptrend appears to peak as price action consolidates. If NZD/USD bulls achieve a daily close above February 23 0.6809 high, the pair will shift to neutral-downward, exposing the 100-DMA as the first resistance level at 0.6843. Once cleared, the next supply zone would be January 13 daily high at 0.6890, followed by 0.6900.

Contrarily, failure at 0.6809 would resume the downtrend, with the January 6 low at 0.6733 as first support. Breach of the latter would expose 0.6700, followed by the February 24 daily low of 0.6630.