Currently, NZD/USD is trading at 0.7187, down -0.02% on the day, having posted a daily high at 0.7192 and low at 0.7184.
NZ: Economy still has solid credentials - ANZ
NZD/USD has been consolidated overnight in quiet holiday markets, supported by the hourly 20 sma and resisted by the 50 sma on the same time frame. The focus will be with the daily auction later that is priced by futures to result in a 3% decline in WMP prices after Fonterra that had recently upgraded its milk collection forecast for 2016/17. For today, the focus will be with the RBA minutes for February hat could offer a bullish scenario for the antipodeans if they are to continue the upbeat theme from the RB's rhetoric that we have seen of late. Meanwhile, analysts at Westpac noted that Momentum remains negative for the bird and they are targeting 0.7130 during the days ahead.
NZD/USD 1-3 month:
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 to 0.7000 or lower. Granted, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar’s trend. (21 Feb).
Meanwhile, the price is capped by the 20-d sma at 0.7237 with the 50-d sma located at 0.7131 below. The descending resistance line is located at the psychological 0.7000 level that meets the 200-d smoothed ma potentially offering a strong support line. 0.7380 on the wide guarding space on the 0.74 handle and 0.74846th Sep 2016 highs.
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