NZD/USD: fundamentals don't tally with technicals

Currently, NZD/USD is trading at 0.7057, down -1.26% on the day, having posted a daily high at 0.7153 and low at 0.7051.

NZD/USD continues to lose its flight on the back of broad dollar strength after breaking below mid-Feb's lows and channel support structure. The same principals apply across the board in respect to the dollar's resurgence and the Fed speculated to hike rates this month or at least very soon.  Meanwhile, rebounds off 2015’s structural lows completed at 0.7485. A consolidation pattern is still developing Intra-month/inter-week.

Key technical outlook from Westpac:

"Recent sharp rebounds and positive turns in weekly momentum suggest that a solid base has for 1Q’17 formed at 0.7145-60. Current rebounds remain within a tight uptrend but show signs of maturing above 0.7500, so forming an inter-week top. Daily momentum is high but not yet turning, so a top is still to be confirmed, The next decent move is likely to involve a test of the 0.6965-0.7000 area."

"Until a top is confirmed, the uptrend could still force a final squeeze before the anticipated pullback develops. A break below 0.7070 would increase the likelihood of an early and deeper pullback. As with AUD, the style and depth of the next pullback will determine the profile of subsequent squeezes higher."

Conclusion:

"Broad consolidation patterns are forming. Rebounds off 0.6860-65 are near to completion. Dips are seen as interim moves before another squeeze higher develops."

US dollar strength could play catch up with widening yield spreads - BTMU