NZD/USD: bears taking charge with eyes for 0.7075

NZD/USD has edged further to the downside in the early hours of Asia and was in consolidation, but just ahead of the Tokyo open, the price is starting to give out.

NZD/USD has been on the backfoot with a spike in the sentiment for a Fed hike thus coming March due to improvements in the US data and Fed speakers advocating for action sooner than later. Despite delivering a campaign-style speech, Trump was an additional catalyst for a stronger dollar when his address to the joint congress was a flawless bullish and confident tone and even came with some specific detail in respect to budget plans to rev up the US economy.  

Forex today: risk sentiment back in vogue

The US data overnight was supportive of a Fed hike according to various analysts and economists and we now await the key jobs data to arrive next week instead of tomorrow. For the time being, markets will continue to monitor for hawkish rhetoric from Fed officials and key US data. Elsewhere, the NZ economy remains robust and dairy prices have risen, but these forces are subservient to the US dollar’s trend, argued analysts at Westpac. Just today, RBNZ's Wheeler was speaking at the end of the NY session and said that risks were about equal but the NZD was still too high, although his comments were largely ignored until recent trade and we have seen fresh lows at the Tokyo open. 

US data: a case for higher US rates - ANZ

NZD/USD levels

NZD/USD has dropped below 0.7118 (50-DMA) guarding 0.7075 (low Jan.16). The 15th Dec high is located at 0.7045.  While below 0.7245 (high Feb.23), the market is directly offered, but a rally through to 0.7332 (high Feb.8) could open doors to 0.7402 (high Nov. 8). 

NZD/USD 1-3 month: "The Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down to 0.7000 or lower," suggested analysts at Westpac.