NZD/USD: sturdy despite a poor GDT auction, holding above the 100-hr SMA
|- Despite a poor GDT auction, yet the NZD strengthened.
- Key support is 0.6680 while resistance comes as 0.6850.
NZD/USD is currently trading at 0.6752 having made a high of 0.6759 and a low of 0.6687, resilient to a poor GDT auction having pierced the descending 100-hr SMA at 0.6751 and consolidating there in early Asia.
"It is somewhat ironic that one of the remaining support factors for the NZD, namely commodity prices, weakened overnight with a poor GDT auction, yet the NZD strengthened. It looks to be a positioning related move, especially ahead of approaching US holidays and perhaps implies that the kiwi has found a near-term base just below 67 cents," analysts at ANZ explained.
At the same time, the US 10-year note yield fell 4bps to 2.83% and the DXY was lower within the day's range of between 94.5620-94.9780, closing -0.29%. Fed fund futures yields continued to price 1 ½ more hikes in 2018.
The week ahead:
We are now into the US holidays but later in the week, we have US Jun ADP private payrolls, Jun ISM non-manufacturing survey, June FOMC meeting minutes (Thu), US Jun employment report, and US tariffs on $34bn of Chinese imports taking effect (Fri) as major risk events.
NZD/USD levels
Key support is 0.6680 while resistance comes as 0.6850. Near-term, the 100-hr SMA caps while the 10-hr SMA draws in demand. On the wide, while below the key 200-month moving average resistance at 0.7007 longer term technicals have remain bearish. Only a break above 0.6850 would alleviate the downside pressures and eyes remains towards 0.6675.
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