NZD/USD close to daily highs in 0.6920 region on USD weakness
|- The US dollar is in correction mode but still at a multi-week high.
- The main event of the week is the FOMC’s minutes on Wednesday scheduled for 18:00 GMT.
The NZD/USD pair is trading at around 0.6925 up 0.08% on Monday.
The kiwi fell from the high at 0.6933 in Asia and found an intraday floor at 0.6883 in Europe. The pair rebounded almost 40 pips and is trading in the 0.6925 region.
In Asia, the New Zealand Retail Sales for the first quarter of 2018 decelerated to 0.1% from 1.4% seen previously. This is another bearish data from New Zealand further confirming that the economy is rather sluggish and at no risk of over-heating.
On the other hand, the US dollar received an initial boost in early Asia as US Treasury Secretary, Steven Mnuchin, said that the trade war between the United States and China were “put on hold”.
The positive news about international trade sparkled risk-on sentiment across the board with a spike in the US Dollar and in major stock market indices.
However, the US Dollar Index (DXY) which measures the greenback relative to a basket of currencies is currently having a small correction lower but is still trading at multi-weeks’ highs at 93.70 at the time of writing.
Coming up next in the American session, the speech of Atlanta Fed R. Bostic who is a voter and centrist at 16:15 GMT, followed by Philadelphia Fed P. Harker’s speech, non-voter and hawkish at 18:05 GMT and finally Minneapolis Fed N. Kashkari, non-voter and dovish at 21:30 GMT. The speeches come ahead of the key event of the week, the FOMC minutes on Wednesday. USD bulls will be on the lookout for any confirmation that inflation and growth are on track in the US.
NZD/USD 4-hour chart
The main trend is bearish. Resistances are seen at the 0.6938 and 0.6988 swing highs while supports are seen at the 0.6884, 0.6872 and 0.6851 swing lows. The market is trading below its 100 and 200-period simple moving averages (SMA) on the 4-hour time frame but slightly above the 50-period SMA suggesting that the bear trend might be slowing down.
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