NZD/USD: USD recovery and soft NZ trade balance caps the upside around 0.6905/10
The New Zealand Dollar (NZD) struggles around 0.6900 mark against the US Dollar (USD) during early Asian sessions on Wednesday. The pair continues to repeat its latest tendency of not rising past-0.6905/10 resistance-region since February 04. This time, the overall recovery in the USD after yesterday’s plunge and soft New Zealand trade balance details are likely playing their role.
The USD failed to lure much of the buying bids on Tuesday as the absence of market-moving facts from the Fed Chair Jerome Powell’s testimony and sluggish housing starts disappointed the greenback buyers.
The US Dollar recovered some of its previous losses on early Wednesday as lack of big releases and Powell’s overall upbeat remarks on Tuesday pushed investors toward expecting another round of positive statements from the Fed Chair when he appears before the House Financial Services Committee.
Additionally, softer than expected New Zealand trade balance also confined the Kiwi gains. New Zealand trade balance declined to $-914 million on a monthly basis during January versus $-300 million market consensus and a downwardly revised prior of $12 million. Looking at the yearly figure, the trade balance shrank to $-6.360 billion against $-5.496 billion forecast and $-6.110 billion previous revised mark.
With the Fed’s Powell still left for one day of semi-annual testimony, investors will closely observe the announcements around 15:00 GMT. Even if it is expected that most of yesterday’s remarks are likely to be repeated today, any surprises might not be overlooked and could quickly affect the markets.
NZD/USD Technical Analysis
On a daily closing beyond 0.6910, the NZD/USD pair can quickly rise to 0.6940 before aiming December 2018 high around 0.6970.
Meanwhile, 0.6870, 0.6820 and 0.6790 might entertain sellers during the pair’s pullback.