NZD/USD eyes the biggest weekly loss in three months as bears approach 0.6200, US data in focus

• NZD/USD takes offers to renew intraday low, prints five-day losing streak.
• Firmer US data, President Biden’s comments keep bears hopeful amid hawkish Fed bets.
• Absence of major New Zealand statistics adds strength to the bearish bias.
• US Core PCE Price Index, Durable Goods Orders for November will be important for near-term directions.

NZD/USD bears keep the reins around 0.6240, marking the fifth consecutive daily fall near the intraday low while bracing for the biggest daily slump since late September. That said, the Kiwi pair’s latest losses could be linked to the sour sentiment in the market, as well as the hawkish Fed bets, ahead of the key US statistics surrounding inflation and output.

In addition to the fading optimism over China’s pro-growth policies, strong US economics and recent comments from US President Joe Biden could be held responsible for the NZD/USD pair’s latest losses.

That said, a rally in Shanghai’s hospitalization and challenges to China’s medical system due to the latest easing of the Zero-Covid policy seems to probe the previous optimism, mainly backed by expectations of stimulus from China and reopening of the world’s second-largest economy.

Elsewhere, the US Senate’s passage of a $1.7 trillion government funding bill and the latest comments from US President Joe Biden showing readiness to tame inflation keeps NZD/USD bears hopeful.

On Thursday, strong prints of the US economic growth and personal consumption renewed hawkish expectations from the US Federal Reserve and propelled the US Dollar. To talk about the statistics, the US economy expanded at an annualized rate of 3.2% in the third quarter (Q3), per the final readings of the Gross Domestic Product (GDP), versus 2.9% previous estimates. Further, the Personal Consumption Expenditure (PCE) Prices match 4.3% QoQ estimations during Q3 2022 whereas the Core PCE improved to 4.7% QoQ versus 4.6% market forecasts.

Against this backdrop, S&P 500 Futures print mild losses while tracking the Wall Street benchmarks. Further, the US 10-year Treasury bond yields extend the previous day’s rebound near the one-month high, marked early in the week.

While the sour sentiment and firmer yields join hawkish Fed bets to favor the NZD/USD bears, the quote’s further downside hinges on the US Core Personal Consumption Expenditure (PCE) - Price Index, the Federal Reserve’s preferred inflation gauge, as well as Durable Goods Orders, for November.

Forecasts suggest that the US Core PCE Price Index remains unchanged at 0.2% MoM. However, the Annualized forecasts suggest softer figures of 4.7% YoY versus 5.0% previous readings. Further, US Durable Goods Orders could register a contraction of 0.6% in November compared to the previous increase of 1.1% (revised from 1.0%). Given the mixed forecasts, the NZD/USD bears may witness a shock in case the data disappoints.

Technical analysis

A clear downside break of the 10-week-old ascending trend line, around 0.6295 by the press time, directs NZD/USD bears towards the 200-DMA support level near 0.6200.