NZD/USD fails to capitalize on a weaker US Dollar and tumbles below the 200-DMA

• NZD/USD fails to capitalize on sentiment improvement and tumbles influenced by a technical indicator.
• The US Dollar tumbled while UST bond yields rose, a headwind for the NZD/USD.
• NZ Trade of Balance and US Existing Home Sales data eyed.

NZD/USD reversed its course after piercing the 200-day Exponential Moving Average (EMA), tumbling 0.12%, as Wall Street is about to close. US equities are about to finish the day in an upbeat mode, though the New Zealand Dollar (NZD) is at the mercy of technical indicators. At the time of writing, the NZD/USD exchanges hands at 0.6248.

NZD/USD stumbles at the 200-day EMA, despite a risk-on impulse

With the looming US Federal Reserve (Fed) monetary policy meeting, the markets could begin to trade sideways. Even though sentiment improved, the NZD could not capitalize, with markets focusing on Jerome Powell and Co. Therefore, the NZD/USD edged lower after printing a daily high of 0.6281.

Last Friday, the latest round of US economic data cemented the case for an ongoing economic slowdown. Industrial Production eased, Consumer Sentiment deteriorated, as reported by the University of Michigan (UoM), and inflation expectations cooled down amidst ongoing turbulence in the financial markets.

Traders continued to digest the news that UBS bought Credit Suisse, which supposedly could stop the bank’s stock riot. Nonetheless, newswires reported that First Republic Bank stock halted for a ninth time in the day, with shares plunging 50% at one point before pairing losses, dropping 33%.

In the meantime, the US Dollar Index, a gauge for the buck’s value against a basket of six currencies, losses 0.53%, at 103.312. Contrarily, US Treasury bond yields erased their earlier losses, with the 10-year bond yield gaining six basis points at 3.498%.

Aside from this, the New Zealand (NZ) economic docket will feature the NZ Trade of Balance for February, with estimates at NZ $-1.450 B, less than the previous reading of NZ $-1.954B. Exports for January came at NZ $5.47B, while Imports were NZ $7.42 B. Another factor that could underpin the NZD is the Reserve Bank of Australia’s monetary policy.

On the US front, the docket will feature Existing Home Sales and the beginning of the two-day US Federal Reserve Open Market Committee (FOMC) monetary policy meeting

NZD/USD Technical levels