NZD/USD upside looking in jeopardy on 0.72 handle?
Currently, NZD/USD is trading at 0.7211, down -0.15% on the day, having posted a daily high at 0.7223 and low at 0.7207.
NZD/USD was little changed around the recent data that had New Zealand's March quarter current account at USD 0.244bn vs the prior -2.415bn, revised from -2.335bn USD. The Kiwi is looking a little exhausted at the top of the recent ranges and the 10th May rally from 0.6810/20 area has topped at the recent highs of 0.7226.
NZ data
- New Zealand Current Account - GDP Ratio came in at -3.1% below forecasts (-2.7%) in 1Q
- New Zealand Current Account (QoQ) below forecasts ($0.922B) in 1Q: Actual ($0.244B)
- New Zealand Food Price Index (MoM) rose from previous -0.8% to 2.4% in May
- New Zealand Current Account (QoQ) registered at $0.24B, below expectations ($0.922B) in 1Q
The bird has been elevated this year on a weaker tone in the dollar, down over 5% n the DXY YTD. However, it could be a trend that continues if inflation remains subdued and the US economy continues to stall in comparison to the what had been priced in by markets from Trump's fiscal policy expectations. NZ GDP and the Fed tonight will be the clinch-pin for the pair this week.
"The highlight of the NZ data calendar this week is Q1 GDP (Thu). We expect a rebound from a temporarily weak Q4, a 0.8% q/q pace (from 0.4%) and a 2.8% y/y pace (from 2.7%). Less market-moving data includes Q1 BoP (Wed), REINZ house prices, and manufacturing PMI (Fri)," explained analysts at Westpac.
NZD/USD levels
The bird remains above the key 0.7150/69 level that it broke recently but remains capped by the 0.7220's highs. Closes on the 0.72 level holds the key for further bullish attempts with eyes on the 0.7240/55 resistance area first off. However, the continued upside failures are concerning on a long play from here and risks are mounting to the downside after a test of the 20 sma on the 4hr sticks at 0.7206. To the downside, 0.7145 and a break back below 0.7080/90 are key near-term downside areas. On the wide, the 0.7375 YTD highs are a key target to the upside and to the downside, a break below 0.7080/00 opens 0.6970.