NZD/USD catching a bid within bearish territory

NZD/USD is slightly bid ahead of the Tokyo open, having traded with a low of 0.6881 and a recent high of 0.6909.

NZD/USD has made a reversal of the sell-off from above the 0.69 handle to 0.6860 while the greenback has taken the top spot with a break of key technical levels in the DXY recently after Trump winning the elections and renewed hawkishness from the FOMC when the Fed decided to increase interest rates in December and then forecasted three more hikes in 2017. However, technically, the dollar could be a little stretched and overbought territory as analysts at Brown Brothers Harriman have explained. 

Watching for a proper correction in the dollar index - BBH

NZD/USD levels

Meanwhile, spot is trading below the 200 dma at 0.7114 and remains bearish. Analysts at Westpac expect a continuation of the downside and lower to at least 0.6800. "The Fed’s assertive tightening projections plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar’s trend."