NZD/USD: Volatile on 0.72 handle amid RBNZ jawboning & risk-on
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The NZD/USD pair witnessed two-way trading so far this Wednesday, as volatility remained quite high, leaving the spot swinging up and down in a 50-pips range.
NZD/USD: Lacks clear direction
The Kiwi moved away from daily tops of 0.7278 and reverted to the mid-point of 0.72 handle, having found support near 0.7230 in early Asia. The major remains torn between the latest round of currency jawboning by the RBNZ Governor Wheeler and a turnaround in risk sentiment, reflected upon rebounding Asian equities and higher Treasury yields.
The RBNZ Governor Wheeler said during his speech that a lower NZD is needed to increase tradables inflation and help deliver balance growth. Meanwhile, escalating fears over North Korea dissipated, offering some respite to the higher-yielding currency NZD.
Next of relevance for the pair remains the US GDP and ADP jobs report, as markets continue to cheer better NZ building consents data.
NZD/USD Levels to consider
NZD/USD failed above 0.7250 (natural resistance), with 0.7200 (round figure) still guarding 0.7153 (200-DMA) and a break back below 0.7100 (key support) are key near-term downside areas. To the topside, a test of 0.7278/81 (daily top/ 20-DMA) due on the cards, which could open doors towards 0.7342 (50-DMA).
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