NZD/USD bounced from its 50DMA for the fourth time since late-January and is now eyeing a test of 0.7300. US dollar flows will be in the driving seat for the rest of the week, with key stateside economic events incoming. After dropping to its lowest level in over week of just under the 0.7210 mark during early European trade, NZD/USD has moved back to the top of its range this week and is eyeing a test of the 0.7300 level. Dip-buying ahead of the 50-day moving average, which currently resides at 0.72047, likely helped the pair recover from lows. The 50DMA has now “saved the day” for the kiwi on four occasions since the end of January and remains a key level of support. NZD/USD’s recovery is in fitting with a broad weakening of the US dollar versus the majority of its major G10 peers over the last few hours that has seen the Dollar Index (DXY) drop back from near 90.50 session highs to the 90.70s. Note that some on the charts of some market participants, NZD/USD saw a sudden bout of volatility, or even a mini-flash crash, that saw the price drop from the 0.7290s to under 0.7250 and back again in the space of about a minute. This may be a broker error, given data from Reuters has not picked up on this move, but some are suggesting it could have been a “fat-finger”. Not anything to worry about either way. Driving the day NZD continues to nurse losses versus its AUD counterpart, with some citing dovish remarks from RBNZ Assistant Governor Hawkesby overnight, who reiterated that there is still room for more RBNZ monetary policy easing if the economy needs it, given that the recovery remains fragile and uneven. That comes in contrast to an RBA, which held monetary policy setting in place as expected at Tuesday’s rate decision and sounded a little more upbeat on the near-term economic outlook. Returning to NZD/USD, US dollar flows remain in the driving seat and that is likely to remain the case for the rest of the week. USD catalysts have been few and far between, suggesting Tuesday’s downside is likely being driven by positioning ahead of key events later in the week. NZD, meanwhile, did not see much of a reaction despite a shock surge in the GlobalDairyTrade (GDT) Index and While Milk Powder Price Index at the latest bi-weekly auction (rising dairy prices tends to bode well for NZD, with dairy products amongst the country’s largest international exports). NZD traders will be keeping an eye on New Zealand Building Permits data for January, set for release at 21:45GMT on Tuesday, as well as a speech from RBNZ Governor Adrian Orr at 01:00GMT on Thursday, but NZD/USD focus will for the most part remain stateside; Wednesday sees the release of the ISM Services PMI report for February, a timely update on the state of the US’ service sector recovery, as well as February’s ADP National Employment Change estimate, a release that helps set expectations for the NFP release later in the week. Thursday sees Fed Chair Jerome Powell (expected to reiterate the dovish Fed script whilst now showing any concerns about rising bond yields) plus Weekly Jobless Claims numbers and Friday sees the release of the February Labour Market Report, which will be the main event of the week from a global macro perspective. If the US data was to come in strong, this would be likely to instill confidence in the pace of the global recovery which, so long as it doesn’t cause another surge in global bond yields that could threaten equity markets (and so hurt risk-sensitive FX like NZD), should underpin the currencies of small open economies such as the kiwi. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. FXStreet News share Read Next USD/CAD Price Analysis: Market setting-up for a daily bullish impulse FX Street 8 months NZD/USD bounced from its 50DMA for the fourth time since late-January and is now eyeing a test of 0.7300. US dollar flows will be in the driving seat for the rest of the week, with key stateside economic events incoming. After dropping to its lowest level in over week of just under the 0.7210 mark during early European trade, NZD/USD has moved back to the top of its range this week and is eyeing a test of the 0.7300 level. Dip-buying ahead of the 50-day moving average, which currently resides at 0.72047, likely helped the pair recover from lows. 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