NZD/USD under pressure trying to recover while bulls battle to keep the 0.70 handle
|Currently, NZD/USD is trading at 0.7032, up 0.06% on the day, having posted a daily high at 0.7035 and low at 0.7026.
NZD/USD slipped and made a fresh low prior to the trade balance that saw a muted reaction on the release but has picked up a handful of pips since. The New Zealand trade balance for February: -18m vs 180m surplus - (previous was revised to -257m from -285m.) NZD/USD has broken the support line of the sideways channel at 0.7030 in the absence of fresh catalysts. However, Fed centrist Williams spoke earlier who said that 3-4 hikes in 2017 made sense given the current state of the economy, and not conditional on fiscal stimulus. He was bullish about growth in the economy suggesting that it is slightly above trend and this lead to a spike in US yields and is fueling the downside in the antipodeans, while elsewhere, the dollar remains under pressure. The House GOP leadership recently announced that there will not be a vote on the healthcare bill today and this is weighing on the greenback. Instead, the entire House GOP conference will meet later today to discuss next steps.
Forex today: yen was top performer in an otherwise healthcare bill let down
Meanwhile, there is potential for higher to the 0.7150-0.7300 area during the month ahead, according to analysts at Westpac. "Further out, the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down towards 0.6900. Weaker dairy prices plus the RBNZ’s emphatic reminders it is on hold for a long time should also weigh. (21 Mar)."
AUD/NZD and rates outlook - Westpac
NZD/USD levels
Downside pressures have taken the bird away from the 0.71 handle and a break of the recent lows of 0.7016 targets the 0.6950/60 levels. these are the key supporting areas guarding 0.6880 and March lows. On a reversal, however, the double-bottom of potential resistance at 0.7130 on the 4hr chart in mid-Feb and late Fed business. 0.7245 comes as the late Jan/early Feb support and double top resistance Feb 16th and 23rd.
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