NZD/USD consolidates the aggressive correction/reversal of 0.6970's slide

NZD/USD is consolidating the bid and strong recovery attempt of the recent slide from 0.6970's after the FOMC minutes left some room for inflation to run higher before the Fed would become more aggressive than what markets have already priced in, (two further hikes for 2018). Currently, NZD/USD is trading at 0.6929 with a high of 0.6933 in early Asia and a low of 0.6923, (overnight low was 0.6887).

Analysts at ANZ noted that the risk-off sentiment was the dominant theme, although said that the majority of the NZD’s move lower occurred during the Asian time-zone. "In fact, Kiwi has had a late bounce on some perceived dovish comments in the FOMC minutes. We suspect today will be another range-bound day, but with NZD maintaining a downside bias overall."

Analysts at Westpac pointed out from the FOMC minutes, a few lines stood out: 

"(1) A strong hint re the 13 June meeting, "it would likely soon be appropriate for the Committee to take another step in removing policy accommodation"; (2) There seems to be a lack of urgency to tighten more aggressively given that “modestly above 2 percent would be consistent with the committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations,” and "many" saw only "muted" wage pressure; while a "few" noted neutral will be in sight...before too long," which would require rewording the existing guidance that policy is accommodative."

NZ data:

New Zealand releases April trade data showed that there was a bigger surplus although the March deficit was larger than originally reported:

The trade balance for April surplus of 263m.
expected surplus 198m, previous was a deficit of 156m and was revised from a 86m deficit.

NZD/USD levels 

Support comes in at 0.6920, 10-D SMA and 0.6850 below there. To the upside, 0.6950 and 0.6980 mark key levels of interest, (21-D SMA 0.6986). The next upside key target beyond there is located at  0.7080. The NZD/USD has taken out the 200-month moving average resistance at 0.6980. However, weekly technicals remain bearish and RSIs are biased to the downside. Below 0.6850, 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.