NZD/USD: Subdued Awaiting RBNZ/FOMC
NZD/USD
had been a one way street this month until the support of the ascending
channel was broken at the end of last week ahead of both the RBNZ and
FOMC this week.
NZD/USD had otherwise been well supported as it
targets 0.7175 being the Feb 2015 low) and has been doing so with the
recent NZ economic data that has been better than expected in both the
housing market and CPI that had been weakening the case for an April (vs
June) OCR cut especially considering the recent surprise cut last
meeting around.
The FOMC is not expected to favour a hike this
month, but instead, markets will be looking to key data points as a
gauge as to when to expect the Fed's tightening cycle to continue this
year, because while they continue to hold, we are seeing sharp declines
in the US dollar aiding the commodity sector and related currencies to
recover.
Preview of the week ahead in the U.S. - Nomura
NZD/USD levels
With
the support giving out at 0.6950, the ascending channel has come into
jeopardy and the break of the 20 dma last week at 0.6881 opens the way
to 7th April lows at 0.6768 and the 50 dma. To the upside, the channel
holds 0.6900 as a psychological target that if breached, would buy some
time for the bulls in a continuation of the 19th Jan rally and major
reversal that recently broke the key resistance of the double top
earlier in the year at 0.6895.
