Search ForexCrunch
  • US Dollar Index lifeless around mid-96s.
  • NZIER lowers New Zealand’s 2019 GDP growth forecast.
  • NZ GDP data and FOMC meeting will highlight this week.

The NZD/USD pair started the week on a strong footing and advanced to its highest level since late February at 0.6874 before losing its traction in the last couple of hours. As of writing, the pair was up 0.25% on a daily basis at 0.6860.

Although  the New Zealand Institute of Economic Research (NZIER) in its latest publication painted a gloomy picture with regards to New Zealand’s economic outlook,  the fact that the NZIER revised its NZD exchange  rate expectation higher helped the kiwi. The New Zealand dollar TWI – trade-weighted index – has been revised higher throughout the projection period, reflecting the increased yield appeal of the NZD,” the NZIER noted. Moreover, the  pair took advantage of the broad-based USD weakness and didn’t have a hard time pushing higher.  

Meanwhile, the modest recovery witnessed in the 10-year T-bond yield allowed the US Dollar Index to limit its losses during the European session and forced the pair to start erasing its gains. The DXY, which slumped to a 2-week low of 96.38 earlier today, was last seen flat on the day at 96.50.

Later this week, the FOMC meeting  on Wednesday and the GDP data from New Zealand on Thursday will be watched closely by the market participants.

Technical levels to consider

The pair could face the initial resistance at 0.6875 (daily high) ahead of 0.6940 (Jan. 31 low) and 0.7000 (psychological level). On the downside, supports are located at 0.6825 (50-DMA), 0.6800 (psychological level/100-DMA) and 0.6745 (Mar. 7 low).