NZD/USD: testing fresh lows at 0.7180 ahead of 0.7120

Currently, NZD/USD is trading at 0.7186, down -0.29% on the day, having posted a daily high at 0.7206 and low at 0.7182.

Fed's Williams: Rate increase up for 'serious consideration' at Fed's March meeting

NZD/USD has given way to the greenback breaking below the 0.72 handle to test the bull's commitments at 0.7180 after sliding gradually from 0.7238 overnight highs. The drivers came overnight in US data and in early Asia with hawkish Fed speakers before the NZ t Q4 Terms of Trade +5.7% q/q vrs the expected +4.0%. US data overnight was mixed with strong consumer confidence but  GDP Q4 was unchanged at 1.9% vrs the revision to 2.1% that had been expected.

Fed's Williams (a non-voting member and usually Hawkish) saying that he sees a March hike getting more serious consideration and Fed's Dudley saying that the case for a rate hike is more compelling while Fed's Harker repeated comments that three hikes in 2017 are appropriate. We now await Trump's address to Congress today that will be streaming from 2pm Sydney time, 9pm Eastern, 2am GMT and the market will be looking for his fiscal plans and their timings.

NZD/USD levels 

Analysts at Westpac are expecting a neutral outlook having been stuck around 0.7200 for the past few weeks and unlikely to see too much US dollar movement ahead of the Trump speech. Meanwhile, the price has dropped below the 20 and 50 smas on the hourly sticks which brings in the 200 smoothed sma on the four charts ahead of 0.7120 support below 21st Feb lows at 0.7128 guarding the previous double top zone at 0.7040/50 zone. To the upside, 0.7204 and 20 day sma guards 0.7250 and 0.7374 6th Feb highs.