NZD/USD: supported on the possibility of a hint of hawkishness from RBNZ this week

NZD/USD is trading at 0.6893, down -0.04% on the day, having posted a daily high at 0.6909 and low at 0.6892.

NZD/USD is consolidated ahead of the RBNZ this week and tucked just below the 20-dma at 0.6934 with an opening price at 0.6895. The dollar is performing well with the market responding to rising odds of a Fed hike in June to 80%. The DXY was in a range of between 99.079 and 99.688 with a YTD return of 2.50% within the 52WK range of 93.019-103.82. Fed speakers have been hyping up markets for rate hikes this year so far and today we have Rosengren providing an economic outlook in Vermont and Kashkari speaking about trust and ethical challenges in the financial services industry. 

In respect to the RBNZ, there could be a hint of hawkishness on the cards considering how conditions have changed in the last three months, as explained by analysts at Westpac noting the positives being the jump in inflation, drop in NZD TWI, and higher dairy prices. "These more than offset the cooler housing market and Q1 GDP disappointment."

NZD/USD levels

NZD/USD sticking to tight trading ranges

The 0.6880 level is first support should the market slip out of the current tight ranges targeting the support zones of 0.6820/50/60. Below 0.6700 we have the 0.6675 level as the 29th May 2016 high. On a break higher through the 0.69 handle, 0.6920/30 is the immediate resistance area still along with the 20-d sma at 0.6940 ahead of psychological 0.70 level. The 17th April highs of 0.7035 are next up ahead of 0.7060/70, being a further key resistance area through the 200-d ema (0.7047). The double bottom at 0.7130 as the mid-Feb lows could be a strong area of resistance.

AUD/USD: what will the Asian session bring for AUD traders, more downside to follow?