NZD/USD: bulls bounced from 21-hr SMA and now target break of 0.6820

• China starts to intervene with easier monetary policy, supporting risk.
• The NZD remains at the whims of global forces but held in reasonably tight ranges overnight.

NZD/USD perked up overnight and was on course to reverse the supply from the 22nd and 23rd July highs while the mood was positive. Currently, NZD/USD is trading at 0.6799 having made a high of 0.6818 and a low of 0.6789.

While the high betas were picking up on a mixed dollar and signs that China starts to intervene with easier monetary policy, there is still some scepticism out there, especially due to a larger ($500 Bln) tariff threat looming from the US.  

However, as analysts at ANZ explained, there wasn’t a lot to report in the currency world overnight, with markets drifting ahead of this week’s ECB decision and a key meeting between Trump and Juncker. “The NZD remains at the whims of global forces but held in reasonably tight ranges overnight.”

Traders await key US GDP data

Next up, we have the NZ trade balance on the cards for today. However, the key data that markets are looking out for will not fall in until the end of the week in the US annualised GDP data. A very strong Q2 outcome has long been expected by the market and it could underpin a stronger resurgence in the dollar. ” Following a modest gain of 2.0% in Q1, in part because of particularly poor weather, US GDP is set to bounce over 4.0%,” analysts at Westpac Banking Corporation explained.  

NZD/USD levels

Support is located at 0.6720 and resistance remains located at 0.6860. Bullishly, the price has held the 0.6760 level and is above the 10/50-hourly SMAs, breaking up through the 21-hr SMA at 0.6794. 0.6820 caps in the near term. However, on a break of 0.6920, the June highs will come into focus. The 200-month moving average resistance at 0.7007 is next key level.