NZD/USD has been riding weakness in the greenback in overnight sessions and remains better bid as we approach Tokyo opening.
NZD/USD is making its way in a correction and headed for a reversal of the downtrend from 0.6784 highs on the 17th March. The weakness in the greenback comes in a mixed outlook in respect to the US economy and recently hawkish comments from various Fed members vs a dovish backdrop from the FOMC and today the inflation and PCE data was mixed.
Markets will turn to Yellen later today in New York to capitalize on any further remarks, dovish or hawkish, to try to get a sense on timings of the next rate hike while the real showdown for this week with be nonfarm payrolls on Friday.
In respect to the Kiwi, specifically, there is a soft undertone due to speculation that the RBNZ could cut again as soon as April’s meeting following the RBNZ’s 25bp rate cut on 10 March. At that meeting, the RBNZ signalled that it expects to cut once more to 2.0%.
NZD/USD levels
0.6668 27th March low and penetrated the 4hr 200 sma at 0.6688 today. The price continued through the 100 sma on the same time frame at 0.6724. However, we remain in a wide range between 0.64 and 0.69 and the recent price action has been ascending triangle in a bullish formation, as noted the by analysts at Westpac. “Confirmation requires a break above 0.6900. If that occurs, there is potential for a rally into the low 0.70s. If 0.6900 holds, then we will look for a continuation of the range and the possibility of a downside test instead.”
(Market News Provided by FXstreet)