NZD/USD eyes 0.6885 recent lows as dollar firms on rising yields

Currently, NZD/USD is trading at 0.7004, down -0.38% on the day, having posted a daily high at 0.7046 and low at 0.7002.

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NZD/USD is slipping lower from a move the penetrated below the cluster of hourly ma's around 0.7020 support with 0.6990 as yesterday's low in sight. The greenback is firming up as US 10 year yields rise to 2.41 61 on the session and US stocks make continue to perform well in the benchmarks such as the S&P 500 making highs of 2370.

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It has been a light week on data for NZ and next week looks no different. However, the  GDT dairy auction on Tue will be key. Analysts at Westpac explained that NZD/USD has been locked inside a 0.70- 0.71 range since mid-March. "Given the absence of any NZ event risk during the week ahead, we adopt a neutral bias, while acknowledging the potential for a stronger US dollar. A sharp USD rally could easily take NZD/USD down to 0.69."

NZD/USD levels

The analysts at Westpac explained that they see risks of a weaker USD around the US government funding negotiations late April, which could push NZD/USD towards 0.73, but beyond June they expect the more constructive US outlook to weigh, and they target 0.67 by year end. In the near term, we have the 0.7022 resistance and 200 hourly EMA guarding 0.7085 and the 200-d ema. There is a double bottom at 0.7130 as the mid-Feb lows. On the downside, 0.6885 mark the recent lows guarding 0.6675 as the 29th May 2016 on a break of the 0.67 handle.

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