NZD/USD bounces off lows near 0.7155; RBNZ's Wheeler 'coin toss' rate hike

Currently, NZD/USD is trading at 0.7145, down -0.64% or (45)-pips on the day, having posted a daily high at 0.7192 and low at 0.7099.

The New Zealand dollar vs. American dollar experienced difficulties most of the trading day due to a brutal 100-pips sell-off after Trump's soft tone speech to Congress. Furthermore, released US data supported a continuation case as the ISM Manufacturing PMI clocked an actual figure at 57.70, add an impressive 66.4% probability to witness a 'fairly soon' rate hike, according to the FedWatch tool from the CME Group. However, long-kiwi shot down dollar bulls to remind market participants that is not over until is over; what changed in the last hours of the NZA trading session?

Wheelers 'coin toss' rate hike probability

"Risks around future Official Cash Rate movements are equally weighted, reflecting balanced risks around inflation," RBNZ's Wheeler on the interest rate matter.

As David Hargreaves at Interest NZD reported; "Wheeler said the possibility of worsening imbalances in the housing market remains a major risk with continued low interest rates and strong migration, and rising construction cost inflation reflecting increasing resource pressures. "There are upside risks in respect of our migration projections.  Although departures remain low, arrivals have continued to increase with arrivals by migrants on work visas being particularly strong in recent months."

Fed Speakers Sing From The Same Song Sheet!

Historical data available for traders and investors indicates during the last 9-weeks that NZD/USD pair had the best trading day at +1.60% (Jan.17) or 115-pips, and the worst at -1.26% (Jan.18) or 89-pips. Furthermore, the US 10yr treasury yields have traded from 2.46% to 2.39%, up +2.77% on the day at 2.45% or +0.0663.

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 0.7245 (high Feb.23), then at 0.7332 (high Feb.8) and above that at 0.7402 (high Nov. 8). While supports are aligned at 0.7172 (low Feb.23), later at 0.7118 (50-DMA) and below that at 0.7075 (low Jan.16).

On the other hand, Stochastic Oscillator (5,3,3) seems neutral at this moment. Therefore, there is evidence to expect the odds to be at 50/50 for the next leg either up or down.

On the long term view, if 0.6888 (low Jan. 2017) is in fact, the bottom for the first semester in 2017, then upside barriers are aligned at 0.7303 (short-term 61.8% Fib), to avoid 'false breakouts,' only an open and close above this level would open doors towards 0.7400 round figure.

To the downside, supports are aligned at 0.7096 (short-term 50.0% Fib), then a dense support region between 0.6951 (reverse long-term 38.2% Fib) and 0.6888 (short-term 38.2% Fib).

The real news is that the Fed trumped Trump