NZD/USD trips down at the 50-DMA, dives towards the 0.5820 area

• NZD/USD tumbled towards 0.5820s due to broad US Dollar strength.
• US economic data was positive, except for Durable Good Orders missing estimates.
• Market participants eye the US Core PCE, Consumer Sentiment, and Pending Home Sales.

The NZD/USD retreats from weekly highs reached around the 50-day Exponential Moving Average (EMA) and dived towards the 0.5820 area due to overall US Dollar strength across the board, blamed on the US economy beating growing expectations for the third quarter. Also, as shown by Wall Street closing in the red, a risk-off impulse was a headwind for the NZD. Therefore, the USD Dollar appreciated, as shown by the NZD/USD falling 0.10%, trading at 0.5824 at the time of writing.

NZD/USD wobbles trim some of its weekly gains on US data

US equities registered losses between 0.61% and 1.63%, except for the Dow Jones Industrial, up 0.61%. The US Department of Commerce reported that Gross Domestic Product (GDP) for Q3 in the United States (US) grew by 2.6%, blowing estimates of 2.4%, a signal of resilience by the US economy amidst a period of tightening monetary conditions. However, the economy is showing that consumer spending is decelerating, reporting a 1.4% gain vs. 2% achieved in the second quarter.

At the same time, the US Department of Labor reported that unemployment claims increased by 217K but lower than 220K foreseen and above the previous week’s 214K. Even though most data was positive, Durable Goods Orders for September expanded by 0.4% MoM, below 0.6% estimates, showing that inventories are building up.

Hence, the US Dollar Index, a gauge of the buck’s value vs. a basket of rivals, edged up by 0.82%, at 110.585, despite falling US Treasury yields. The 10-year benchmark note rate dropped 7 bps, at 3.929%, as traders speculation for a Fed pivot increased.

An absent New Zealand economic data would leave traders adrift to Australia’s PPI for Q3, alongside US Dollar dynamics. Contrarily, the US docket will feature the Federal Reserve preferred inflation gauge, the Core PCE,  the University of Michigan Consumer Sentiment, and Pending Home Sales.

NZD/USD Key Technical Levels