NZD/USD supported at daily pivot on better data and ahead of Fed

The Kiwi is on a steady recovery path so far this session, having found solid bids at daily pivot of 0.6918, following the release of upbeat NZ current account data. The current account deficit narrowed in the fourth quarter of last year, arriving at -2.335bn versus -2.425bn expected and -5.09bn last.

Moreover, a retreat in the US dollar across the board amidst subdued treasury yields and repositioning ahead of the Fed decision, also lends support to the Asian recovery in the NZD/USD pair. Further, higher US oil amid reports of explosion and fire reported at Syncrude oil sands plant in Canada, adds to the positive tone seen behind the resource-linked NZD.

Later today, the spot will get influenced by the US inflation and retail sales data, although the impact may be limited, as the main risk event for the major today remains the FOMC policy decision, with a 25 bps rate hike already priced-in by markets.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6945/50 (classic R1/ Fib R2), above which it could extend gains to 0.7000 (zero figure) and from there to 0.7051 (20-DMA). To the downside immediate support might be located at 0.6889/87 (Jan 4 & 3 low/ Fib S2) and from there to at 0.6859/ 50 (Dec 23 low/ psychological levels), below which 0.6800 (round number) would be tested