- The next big event for the greenback are the FOMC’s minutes scheduled at 18:00 GMT.
- Overnight the kiwi weakened as the Reserve Bank of New Zealand said that it was ready for quantitative easing if needed.
The Kiwi dropped about 60 pips from its daily high in Asia at 0.6945 and has found an intraday low at 0.6883 in early American session. The market is now coiling around the 0.6900 handle down 0.59% this Wednesday.
Market participants are now eagerly waiting for the release of the FOMC’s minutes at 18:00 GMT. Investors will pay particular attention to any signs of accelerating growth and inflation in the United States. Indeed, Deutsche Bank analysts “expect the Fed to hike three more times this year and four times in 2019, bringing the terminal fed funds rate to 3.4%. Further, the Fed could indicate a fourth hike this year as soon as the June 13 FOMC meeting.”
Overnight, NZD/USD dropped throughout the Asian session as the Reserve Bank of New Zealand’s (RBNZ) Assistant Governor, McDermott said that the central bank was ready for a large-scale asset purchase program or quantitative easing if needed in order to keep the economy afloat. “This is all about planning for the future. There is no imminent prospect,” however, “the probability of needing them at this point in the cycle is higher than it ever was in history and it would be silly of us not to be ready just in case,” said McDermott.
NZD/USD 4-hour chart
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NZD/USD is trading below its 50, 100 and 200-period simple moving averages (SMA) on the 4-hour time frame suggesting a strong downward bias. The 0.6900 handle is acting as support and resistance as the market is coiling around it. A break below the 0.6900 level should bring the market to 0.6851 swing low followed by the 0.6800 figure. To the upside, bulls should meet resistances at 0.6940 supply level and at 0.6975 swing high.
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