NZD/USD advances to 3-week highs above 0.69 ahead of NZ trade data
- Fed's Powell reaffirms the Fed's patient stance.
- US Dollar Index extends slide to 96 handle.
- Coming up: Trade balance data from New Zealand.
The NZD/USD pair, which started the week on a positive note on hopes of the U.S. and China reaching a trade deal, caught a fresh big wave in the last hour and rose to its highest level since early February at 0.6903. As of writing, the pair was trading at 0.6897, adding 0.22% on a daily basis.
The heavy selling pressure surrounding the greenback provided the primary fuel to the pair's upsurge today. The US Dollar Index suffered losses for the third straight day and slumped to its lowest level in three weeks near 96. A more-than-1% drop seen in the 10-year US T-bond yield weighed on the greenback in the NA session and FOMC Chairman Powell's cautious remarks put additional weight on the currency's shoulders. At the moment, the DXY is down 0.37% on the day at 96.05.
In his testimony before the Congress, Powell said that the Fed was ready to use all the available tools to sustain the economic expansion and keep inflation close to 2% target rate and repeated that the Fed could remain patient with the policy and wait and see how the situation evolves.
At 21:45 GMT, trade balance data from New Zealand, which is expected to show a deficit of $300 million in January after posting a surplus of $264 million in December, will be looked upon for fresh impetus.
Technical levels to consider
The pair could face the first technical resistance at 0.6940 (Feb. 1 high) ahead of 0.7000 (psychological level) and 0.7055 (Jun. 13, 2018, high). On the downside, supports are located at 0.6870 (daily low), 0.6800 (50-DMA) and 0.6760 (Feb. 22 low).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
