NZD/USD: eyes on the 0.72 handle after disappointing FOMc minutes

Ross J Burland FXStreet

Currently, NZD/USD is trading at 0.7183, down -0.16% on the day, having posted a daily high at 0.7200 and low at 0.7183.

Economic Wrap: FOMC minutes were not signalling March - Westpac

NZD/USD has been on the bid since the FOMC minutes disappointed the dollar bulls failing to deliver anything concrete in terms of timings of a rate hike and much of the rhetoric familiar to those sceptics that doubt the Fed are in a position to hike as soon as March let alone June. Indeed, US data has been mixed and the Fed needs to see more consistency in the economic recovery that the bulls believe is occurring. The price subsequently rallied through 50 and 20 hourly moving averages but fell just shy of the 0.72 handle Analysts at Westpac are expecting the price to remain neutral in the day ahead and within a narrow range between 0.7130 and 0.7240.

US dollar index erases gains after Fed’s minutes

NZD/USD 1-3 month:

The same analysts expect the Fed’s tightening cycle plus US fiscal expansion to 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," added the analysts.

NZD/USD levels

The FXStreet OB/OS Index is reflecting neutral hourly conditions, while the FXStreet Trend Index is slightly bullish. NZD/USD has the 0.7200 level as a resistance ahead of 0.7240 guarding 0.7280 and the aforementioned Feb highs.to the downside, 0.7140 ahead of 0.7120 guards 0.7040 and January 2017 double top.

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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