NZD/USD: capped at 200-d ema resistance 0.7067 post French election results (Round1)

NZD/USD is trading within a range of 0.7014 - 0.7054 at the start of the week, up 0.20% on the day so far.

The markets were all set for the French election results for round one today and risk-on sentiment on a positive outcome had the kiwi open in a bullish gap. However, compared to euro crosses, the bird was confined to the aforementioned range and awaits further developments from the scheduled events on the calendar this week. 

The US is pretty busy with durable goods and the first estimates for Q1 GDP while the NZ trade balance falls in as the largest domestic event risk for the Kiwi. On a medium term outlook for the kiwi, the Fed’s tightening cycle remains a key focus along with Trump's tax reform promises that should maintain upside pressure on US interest rates and the US dollar.

• Is the 7 May second-round polling likely to change in the next two weeks? - Nomura
• French election R1 update: Macron 23.87% vs Le Pen 21.43%

NZD/USD levels

On the downside, the 0.7000 psychological level guards 0.6933/50 and the 13th March resistance come as first support. Should the momentum kick in, a break of the 0.69 handle opens up the 0.6885 mark as being the recent lows guarding 0.6675 as the 29th May 2016 on a break of the 0.67 handle. On further bids, however, the 17th April highs of 0.7035 guard 0.7060/70 and recent high today around the 200-d ema (0.7067). There is a double bottom at 0.7130 as the mid-Feb lows.