NZD/USD bulls stalling at key 0.6850 resistance
- NZD/USD is held up near an old resistance on the hourly chart around 0.6850.
- US stocks rebounded Wednesday while commodities sank.
NZD/USD is stalling in the break to the upside that took out the 0.6820 resistance in a move that started from as low as 0.6796 and reached a high of 0.6852 in New York. Commodities, and specifically the energy market, has been hammered on Wednesday which is holding up the bull's advance that had otherwise been riding the rally in stocks.
Oil sold off and Brent crude was down 12.8%, at $112.97 a barrel, after earlier falling to as low as $105.91. US West Texas Intermediate fell 18%, to $103.98, both dropping from their highest since 2008. Investors have taken the view that the US ban on Russian oil will not worsen a supply shock.
Meanwhile, US stocks rebounded Wednesday. The S&P 500 rose 2.6% to 4,277.88 from a nearly nine-month low, and the Nasdaq Composite jumped 3.6% to 13,255.55. The Dow Jones Industrial Average advanced 2% to 33,286.25. Risk rallied at the same time that hints that a Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky meeting could take place, although there has been no official agreement to do so. However, they may be tentatively opening themselves to a compromise and markets have run with it.
In an ABC TV interview at the start of the week, Ukrainian President Volodymyr Zelensky again called on Russian President Vladimir Putin for dialogue. Zelensky was stressing that Ukraine is ready to talk and seek compromises, but is not ready to capitulate. However, there are now reports that the Russian delegation at peace talks with Ukraine will not concede anything, stated by the Russian state-run RIA media outlet on Wednesday, citing comments from a Russian delegate.
''Last night’s move reconciles with our view that there are cross-currents at play, and whereas Kiwi FX traders are now less focussed on commodities, they do seem focussed on carry and short end rates, which are up at 7-year highs. But going the other way, we have collapsing domestic confidence and a very wobbly housing market,'' analysts at ANZ Bank said.