NZD/USD: catching a temporary bid from 20-d SMA?

Currently, NZD/USD is trading at 0.7035, up 0.13% on the day, having posted a daily high at 0.7046 and low at 0.7031.

NZD/USD has been on the bid overnight and is carrying on with that theme as we move through the early hours of the Asina shift. Fundamentally, the day was mixed in the US session with Central Banks back into focus. 

Forex today: Aussie leads, US yields drop but dollar robust on Fed speak

We had comments from Fed speakers advocating for four hikes this year alone while the recent hawkishness from the ECB was dampened by headlines suggesting that the ECB's message at its March 9 meeting has been overinterpreted as too hawkish. This drove yields lower in the benchmark US 1-year and enabled the antipodeans to rally. 

"The outlook for the New Zealand economy remains positive, but the risks around the global environment are seen to the downside. RBNZ Governor Wheeler has expressed his concerns about US president Trump’s policy agenda and the potential impact on New Zealand," explained analysts at Westpac, adding, " Market pricing for a rate hike by end- 2017 had been 100% in the early weeks of 2017 but is now back to about 35-40% chance."

NZD/USD levels

There is potential for higher to the 0.7150-0.7300 area during the month ahead, as USD longs are pared, explained analysts at Westpac. Meanwhile, we have the 0.7050 resistance and 200 hourly EMA guarding 0.7080 and the 200-d ema. There is a double bottom at 0.7130 as the mid-Feb lows.

Further out, the analysts at Westpac noted that the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down towards 0.6900. "Weaker dairy prices plus the RBNZ’s emphatic reminders it is on hold for a long time should also weigh." To the downside, the 20-d sma is located at 0.6989 as a key support area.