NZD/USD: do the bulls have legs left after sharp reversal on 0.73 handle?

Ross J Burland FXStreet

Currently, NZD/USD is trading at 0.7309, down -0.07% on the day, having posted a daily high at 0.7317 and low at 0.7309.

NZD/USD has been consolidating the sharp reversal to 0.7318 overnight and targets 0.7350 for the day if the US dollar remains under pressure according to analysts at Westpac.

FOMC Minutes: Policymakers agreed a fall in longer-term inflation expectations would be undesirable

The FOMC minutes gave rise to a weaker dollar and lower yields in addition to Trump who disbanded two business advisory councils following CEO defections. While there are no significant domestic risks ahead, other than PPI, the Aussie jobs report will be in focus today and this event could give rise to some volatility in the antipodeans. That data comes ahead of the July industrial production in the US that is expected to increase 0.3% following a 0.4% gain in the previous month.

NZD/USD 1-3 month:

Further out, the analysts at Westpac argued that if the RBNZ remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then NZD/USD could fall as far as 0.69 by year end.

NZD/USD levels

To the upside, 0.7330 and 0.7370 (9th Aug high) are the first resistance areas on a break of current consolidation below 0.7320. To the downside, 0.7205, the 06 June 22/21 lows and 0.7186 June 15 low along with the 50% of the move up from the 2017 low (May low) at 0.7187 are key areas of support ahead of 0.7150 June 5 high; 0.7127 June 6 low and 0.7100.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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