NZD/USD: bulls going against the grain, 0.6850 holds for now
|- NZD/USD: markets fixated on yields, commodities heavy but kiwi solid.
- NZD/USD: eyes on NZ budget will be watched closely.
NZD/USD has been in the recovery of the 0.6850 territories despite the dollar's spike yesterday. NZD/USD is now consolidating the move and has been trading between 0.6880 and 0.6916 and is currently trading at 0.6899.
While the main theme stays with rising US yields that are underpinning the dollar's correction, the higher betas are bouncing on each dip the dollar takes when US yields stabilise and tick down as investors pile into risk-free government debt - This appears to be the story for today at least.
Today's budget will be watched closely
Analysts at ANZ explained that support levels for kiwi have held for now, and some near-term consolidation is quite possible, but it still feels like it will only be a matter of time before support is tested again with US Treasury yields continuing to push higher. "Today’s Budget will be watched closely but is unlikely to dramatically alter the currency picture."
It’s NZ Budget day: expect an upbeat outlook for economic outlook - ANZ
NZD/USD levels
Support comes in at 0.6850 and resistance at 0.6950 and 0.7080. The NZD/USD remains below the key 200-month moving average support at 0.6980. Technicals are bearish with RSIs that are biased to the downside longer-term on the weekly sticks. Below 0.6850, 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.
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