NZD/USD was the high flyer in overnight trade on the back of Yellen’s dovish tone.
Yellen was sounding far more dovish today than the market had prepared for. Yellen was cautioned against raising rates too far too soon and has set the foundations for further excuses down the line when the Fed do not hike rates in the next coming meetings. In fact, Valeria Bednarik, chief analyst at FXStreet suggested that there may not be any rate hikes until September.
NZD/USD rallied from a low of 0.6728 to 0.6869 and has not looked back since Yellen’s Q&A’s where she again drew a line in the sand when answering questions about the previous meetings and decisions, differences in the statements and specifically with regards to overseas headwinds where she has effectively said the Fed cannot continue to hike rates until there is an improvement in the global economy.
NZD/USD levels
NZD/USD broke up through the 50 4hr sma at 0.6739 and the 50 week sma at 0.6729 while the bulls have eyes on the 0.6772 highs of 17th March. 0.6898 is the next objective on the wide, but a period of consolidation is expected as signified by the RSI readings through 70 on the short term time frames. To the downside, 0.6660 is the key level on a break of 0.6720 and 20 sma on the 4hr sticks at 0.6726.
(Market News Provided by FXstreet)
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