NZD/USD stablising at 0.6980 on better NZ data and soft greenback

Currently, NZD/USD is trading at 0.6986, down 0.00% on the day, having posted a daily high at 0.6990 and low at 0.6978.

Forex today: FOMC hangover session, dollar consolidates losses

NZD/USD was a poor performer dropping from 0.7030 to 0.6972 overnight but has stabilised a little in and has moved some pips to the upside on the back of New Zealand's BusinessNZ & BNZ indicator for manufacturing. This arrived in at 55.2 for February, from a prior of 52.2  that was revised up from 51.6. 

Meanwhile, the dollar remains soft across the board and early offers are coming through in early Asia. Meanwhile, there is little left from the calendar, although we do have the University of Michigan consumer sentiment last came in at 96.3 in Feb after reaching a decade high of 98.5 in January. "What is particularly noticeable is the divergence between political groups. The expectations index is currently 55.5 among Democrats – a recession vs. 120.1 among Republicans – a boom," explained analysts at Westpac who are expecting a further consolidation between 0.6950 and 0.7050.

NZD/USD 1-3 month:  

The analysts at Westpac continue to expect the bird to fall vs the dollar. Key Quotes:"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 to 0.6900 or lower. Additional, and more recent, negative factors have been weaker dairy prices plus the RBNZ’s emphatic reminders it is on hold for a long time. (8 Mar)."

NZD/USD levels

NZD/USD has the 6th March high at 0.7048 ahead of the 1st March low of 0.7098 as key upside targets. There is a double bottom of potential resistance at 0.7130 on the 4hr chart in mid-Feb and late Fed business. However, further ahead and for a stronger level of resistance on follow through, there is the 0.7245 as the late Jan/early Feb support and double top resistance Feb 16th and 23rd. To the downside, 0.6950/60 is still the key support area guarding 0.6880 and March lows.