- Buyers focus on the USD weakness while recent positive news report for the US-China trade added optimism among Kiwi traders.
- FOMC minutes, the US CPI and trade-related headlines will be in focus.
NZD/USD is taking the bids near 0.6740 at the start of Asian sessions on Wednesday. The Kiwi pair is on the positive side for the third consecutive morning as the US Dollar (USD) remains under pressure ahead of the key risk events scheduled to release for the day.
Despite the International Monetary Fund’s (IMF) third downgrade of the global growth forecast in last six months to the lowest level since 2009, the NZD/USD pair benefited on Tuesday as sluggish data from the US and market favor for the safe-havens like Gold and JPY negatively affected the greenback.
Not only investors’ risk aversion ahead of today’s FOMC minutes and the US inflation numbers, but geopolitical uncertainties surrounding Libya, Iran and Saudi Arabia were also in the spotlight that weakened the market optimism.
The US Treasury yield for 10-year government notes, a barometer for the market’s risk sentiment, dropped nearly 2 basis points to 2.5%.
Coming up in the market players’ radar will be the US consumer price index (CPI) data followed by the minutes of the latest monetary policy meeting by the Federal Open Market Committee (FOMC).
The US CPI is expected to increase to 1.8% and to 0.3% versus 1.5% and 0.2% respective priors on a yearly and a monthly basis. The CPI ex-food and energy (MoM) may also rise to 0.2% from 0.1% whereas the yearly figure for the same could remain unchanged at 2.1%.
Today’s FOMC minutes will give more details of the US Federal Reserve’s March meeting when it turned dovish by expecting no rate-hikes during the year 2019. Bears are likely to look for clues as to how fierce the pessimism is among the US monetary policymakers whereas bulls will search for otherwise considering recent improvements in headline data.
It should also be noted that recent headlines that the US Treasury Secretary has scheduled a call between the US and Chinese lawmakers to discuss the trade deal further give positive back-up to the Kiwi when there isn’t any New Zealand data scheduled for release.
NZD/USD Technical Analysis
200-day simple moving average (SMA) level of 0.6730, followed by 0.6700 and 0.6690 are likely nearby supports for the NZD/USD traders to watch ahead of shifting attention back to 0.6650 crucial rest-point.
On the upside, 0.6770, 0.6800 and 100-day SMA level of 0.6810 could entertain short-term buyers.
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