Currently, NZD/USD is trading at 0.7518, down -0.04% on the day, having posted a daily high at 0.7530 and low at 0.7515.
Market and economic wrap: dollar drops on minor tweaks to FOMC statement - Westpac
NZD/USD rallied on the back of a weaker dollar post the FOMC outcome in the overnight session. The dollar tanked with lower yields as traders removed best from the table for an additional hike as soon as September.
Instead, markets are expecting announcements in respect to the balance sheet reduction, and with the performance of the US economy until now, the earliest time a rate hike might be expected from the Fed would not be until December.
NZD/USD 1 day:
Analysts at Westpac suggested that if this morning’s surge can be sustained above 0.7485 (a big if), the next major upside target would be some way off at 0.7610 (Dec 2014 low). "However the rally has been driven by the USD’s reaction to the FOMC, arguably excessive," added the analysts.
Meanwhile, analysts at ANZ explained that they remain somewhat cautious on the kiwi up here, but with USD disenfranchisement growing, it’s difficult to stand in front of the NZD train.
NZD/USD resistance levels
"Technically it’s “blue sky” until around 0.7790, being the 61.8% retracement level of the move from 0.8818 to 0.6130 that occurred between October 2014 and August 2015," added the analysts.
NZD/USD support levels
0.7460 was Friday's 10-month high and 0.7485 was the September high. These are now supports and the bird is better bid above these levels. Below there, the next supports are 0,7400, 0.7386, 0.7280, (11th July high), 0.7205/06 June 22/21 lows; 0.7186 June 15 low; 0.7150 June 5 high; 0.7127 June 6 low. On the wide, on a break below 0.7080/00 opens 0.6970.
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