NZD/USD approaches mild resistance around 0.6780-90 on improved market mood as Ukraine-Russia resume talks

• The New Zealand dollar extends its gains in the week, up 2.03%.
• Ukraine-Russia would resume negotiations on Thursday.  – Tass
• NZD/USD Technical Outlook: Neutral-bearish, but if it cannot breach resistance, it would exacerbate a downward move.
• NZD/USD Technical Outlook: Bearish-harami in the daily chart looms.

The New Zealand dollar advances for the second time in the week and approaches a two-month-old resistance trendline around 0.6790. At the time of writing, the NZD/USD is trading at 0.6779.

Investors’ market mood improved slightly despite the continuation of the Ukraine-Russia war. Headlines around the conflict keep investors on their toes, as high volatility levels make it challenging to predict how financial assets move. According to newswires, the second round of negotiations between Russia and Ukraine, programmed for Wednesday, changed its date. News agency Tass reported that Ukrainian officials are set to arrive in Belarus on Thursday to continue discussions.

The market player’s reaction was muted, as the market sentiment is upbeat, as portrayed by European indexes closing in green, while US equities are rally.

Federal Reserve Chair Jerome Powell remarks

In the meantime, Federal Reserve Chair Jerome Powell said, “We expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month,” and added that the US central bank would follow with reductions to its $8.5 trillion assets.

He added that “I am inclined to propose and support a 25 basis-point rate hike.” Powell said that “the bottom line is that we will proceed but we will proceed carefully as we learn more about the implications of the Ukraine war for the economy.”

The US economic docket featured the ADP Employment Change for February, which rose 475K higher than the 388K, estimated and could probably be a prelude of Friday’s Nonfarm Payrolls report.

NZD/USD Price Forecast: Technical outlook

The NZD/USD is downward biased and trapped within Tuesday’s price action on uncertainty surrounding the Ukraine-Russia war. If the pair closes within that range, it will form a “bearish-harami” candle pattern. That said, If the market mood turns risk-off, that will accelerate a downward move towards lower prices. Furthermore, NZD/JPY daily moving averages reside above the spot price, except for the 50-day moving average (DMA) at 0.6725.

If that scenario plays out, the NZD/JPY first support would be the confluence of the January 6 high and the 50-DMA at 0.6733. Breach of the latter would expose December 15, 2021, high at 0.6701, followed by February 24 daily low at 0.6630.

Upwards, the NZD/JPY first resistance would be a two-month-old downslope trendline around 0.6780-90 range, followed by the 100-DMA at 0.6845 and the January 13 daily high at 0.6890.