- DXY downside is playing into the hands of the bearish NZD/USD thesis.
- NZD/USD bears stay in control below the counter trendline.
As explained in the prior analysis, NZD/USD Price Analysis: Bears eye a break of 0.6300, the bears now need to stay below 0.6300 and the critical counter trendline.
NZD/USD daily chart
We have a possible downside continuation for the rest of the year on the cards with 0.6250 eyed. This ties in with the bearish bias in the US Dollar:
DXY has been pressured below the 104 mark on Wednesday but is holding losses after the Bank of Japan unexpectedly raised the upper limit of its tolerance band on 10-year government bonds to 0.5% from 0.25%.
However, an upcoming recession could keep the Federal Reserve from holding interest rates at higher levels in the FOMC’s projections last week to tame inflation, supporting the greenback and playing into the hands of the bearish NZD/USD thesis