NZD/USD: small bid in otherwise bearish drift, supported by 20 4hr sma

Ross J Burland FXStreet

Currently, NZD/USD is trading at 0.7052, down -0.08% on the day, having posted a daily high at 0.7061 and low at 0.7044.

NZD/USD has caught a small bid despite disappointing data in early trade. New Zealand Building Permits s.a. (MoM) declined to -7.6% in April from previous -1.8%. Markets are thin today with dual holidays that took place overnight and China and HK are closed in Asia today. There has been some choppiness due to the lack of liquidity but round turns have been tight on the short term sticks. For the day ahead, it is feasible to target the upside and 0.71 handle according to analysts at Westpac that say the bird retains positive momentum.

Fed's Bullard: Rate close to an appropriate rate

NZD/USD 1-3 month:

Further out, the analysts argue that the Fed’s tightening cycle plus US fiscal expansion should eventually reassert upside pressure on US interest rates and the US dollar, pushing NZD/USD below 0.6800 by year end. "US factors should outweigh local factors which are mostly supportive (25 May)."

NZD/USD levels

NZD/USD's 20 4hr sma at 0.7047 today has been supporting the ascending channel. 0.7080 is the near-term resistance before 0.7100 and 0.7148. To the downside and below the 20 4hr sma lies 0.7000, 0.6980 and the 50 daily sma at 0.6952 are the key supports.

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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