NZD/USD: Buyers lurk around 0.6860 resistance turned support, signal return of 0.6900
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NZD/USD: Buyers lurk around 0.6860 resistance turned support, signal return of 0.6900

  • Friday’s US Dollar weakness favors Kiwi buyers to keep the quote above 0.6860 support.
  • Comments from Fed policymakers could direct immediate trade sentiment with 0.6900 likely being in focus.

NZD/USD is taking the bids around 0.6875 at the start of Asian sessions on Monday. The quote maintains its bounce from 0.6860 resistance-turned-support with fewer data/events on hand carrying Friday’s sentiment forward. The US Chicago Fed national activity index and speeches by the Fed’s Charles Evans and Patrick T Harker can offer fresh impulse to traders.

In spite of failing to surpass a downward sloping trend-line stretched since June 2018, the NZD/USD pair didn’t slip under descending support (previous resistance) that connects February high and is near to 0.6860.

Friday’s sluggish prints of the US Markit PMI’s, coupled with inverting yield curves, helped Kiwi buyers lurk around 0.6860. The Markit composite purchasing manager index (PMI) for the US fell to 54.3 versus 55.5 prior for March whereas manufacturing PMI posted a soft figure of 52.5 against 53.6 forecast. It should also be noted that the US yield curve marked the inverted spread between the 3 month and 10 year notes for the first time since the great financial crisis that led investors off from the greenback.

With fewer catalysts on hand, traders may now concentrate on scheduled speeches from the US Fed policymakers, including the Federal Reserve Bank of Chicago President Charles Evans and Patrick T Harker,  the eleventh president and chief executive officer of the Third District Federal Reserve Bank, at Philadelphia. Evans is scheduled to give two appearances namely at 01:45 AM and 06:00 AM whereas Harker is up for speaking at 10:30 AM GMT. Charles Evans is a dove while Harker appears less in public making both their speeches important for the US Dollar traders.

At the data front, February month Chicago Fed national activity index will be released at 12:30 GMT with previous month figure being at -0.43.

NZD/USD Technical Analysis

Unless declining beneath 0.6860 support-turned-resistance line joining February month highs, the NZD/USD pair continues to signal the return of 0.6900 mark. However, a longer-term trend-line resistance, at 0.6920, can challenge buyers afterward.

Meanwhile, a downside break of 0.6860 highlights 0.6825 and 0.6800 supports with an ascending trend-line that joins lows since January 22 likely limiting further downside near 0.6760.

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