NZD/USD counter-move to 0.6900 as the US Dollar is taking a break
- The US dollar is having a corrective move after reaching multi-week’s high.
- The New Zealand budget release is scheduled for Thursday at 2:00 GMT, any negative surprise can send NZD lower.
The NZD/USD pair is trading at around 0.6900 up 0.55% on Wednesday.
NZD/USD found an intraday floor just above the 0.6850 level in Asia and rose steadily in Europe. It is trading in the 0.6900 region as the European session came to an end.
The kiwi is taking a breather after establishing a new 2018 low on Tuesday on the back of strong USD demand. The market has been selling bonds and stocks in favor of the greenback.
The 10-year Treasury yield rose to 3.095% on Tuesday and bulls tested the level again on Wednesday while the US Dollar Index rose to 93.63 on the day but is now retreating lower in the 93.40 region.
The kiwi is following its big bother Aussie which is also trading higher on the day as the commodity-linked currency AUD is affected by stabilizing copper prices in the last 24 hours.
Looking ahead on Thursday, the New Zealand government will be releasing its budget. Interest rates in New Zealand are expected to stay unchanged for an extended period of time and any negative surprise can negatively affect the NZD.
NZD/USD 4-hour chart
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The trend is bearish and immediate support is seen at the 0.6850 psychological level close to the low of the day, followed by 0.6830 previous demand level. To the upside, resistance is seen at 0.6900 supply level with the resistance at the 0.7000 handle. The kiwi is trading below its 50, 100 and 200-period simple moving averages on the 4-hour chart suggesting a strong downward momentum.
Author
Flavio Tosti
Independent Analyst
