NZD/USD failure at 0.7000 spurred a fall in the pair on a firm US dollar

• The NZD/USD fell on the last day of March amid a downbeat market mood.
• Russia will fulfill natural gas agreements but must be paid in Russian roubles.
• US Core PCE, the Fed’s inflation gauge, rose by 5.4% y/y.
• NZD/USD Price Forecast: Two bearish signals suggest more US dollar strength lies ahead.

After Wednesday’s attempt to reclaim 0.7000 as trader’s book profits, the New Zealand dollar retreats amidst quarter and month-end flows, a risk-off market mood, and broad US dollar strength. At 0.6933, the NZD/USD reflects the aforementioned.

Geopolitical affairs dominate headlines and market mood as March ends

Meanwhile, as Wall Street closes, the market sentiment is negative, spurred by no meaningful resolution between Russia and Ukraine and Russian President Vladimir Putin reiterating to Europe that payments for natural gas need to be in roubles; otherwise, if demands are not met, active contracts would be halted. Later, the French Finance Minister, Le Maire, said that France and Germany are preparing for a probable scenario of a halt in Russian gas flows.

That headline tumbled oil prices and dragged commodity currencies like the Canadian dollar and the antipodeans.

Meanwhile, the greenback finished March on the right foot, as portrayed by the US Dollar Index, rising 0.53%, up at 98.361. Contrarily, US Treasuries recorded gains at the short-end of the curve, while the 10-year T-note benchmark rate is almost flat at 2.349%.

Aside from those developments, the NZD/USD pair traded as a risk-sensitive currency, weakening on Eastern Europe issues. Furthermore, the lack of economic news from New Zealand keep traders glued to their screens, as US macroeconomic data crossed the wires.

The US docket featured the Federal Reserve’s favorite measure of inflation, the Core Personal Consumption Expenditure (PCE), which excludes volatile items for February, which rose by 5.4% y/y, lower than the 5.5% estimated.

At the same time, the US Department of Labor revealed that US Initial Jobless Claims for the week ending on March 26 increased by 202K, higher than the 197K expected.

NZD/USD Price Forecast: Technical outlook

The NZD/USD daily chart is forming a bearish-engulfing candle at press time, per the last two-days price action. Also, failure to reclaim 0.7000, for the second time in the previous seven days, formed a double-top, which added to a fundamental bias of US Dollar strength as the Fed hikes rates aggressively, could send the NZD/USD aiming lower.

The NZD/USD first support level would be the 200-day moving average (DMA) at 0.6907. Breach of the latter could send the pair towards an upslope trendline drawn from February lows around 0.6811 and then the 50-DMA as the last line of defense at 0.6757.