NZD/USD sidelined awaiting key catalysts

Currently, NZD/USD is trading at 0.6968, down -0.01% on the day, having posted a daily high at 0.6973 and low at 0.6968.

• High expectations of a good nonfarm payrolls report - Nomura
• Forex today: subdued, all eyes on Trump/Xi summit and nonfarms Friday

NZD/USD is flat in early Asia while markets are thin and awaiting catalyst for the US session today with the nonfarm payrolls key event. Analysts at Nomura expect closer attention to the outcome from last month's activity in the jobs sector. Markets continue to price in a Fed hike in June with the Fed fund futures yields are slightly firmer, now pricing a June rate hike as a 75% chance (from 70%), as analysts at Westpac pointed out. 

NZD/USD 1-3 month:  

The analysts at Westpac see potential for NZD/USD to run higher to the 0.7150-0.7300 area during the month ahead, as USD longs are pared. "Further out, 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 towards 0.6900. Weaker dairy prices plus the RBNZ’s emphatic reminders it is on hold for a long time should also weigh."

NZD/USD levels

On the upside, a break of 0.6980 opens up the 20-d sma at 0.7016 and 3rd April high of 0.7022 that guards 0.7080 and the 200-d ema (0.7078). There is a double bottom at 0.7130 as the mid-Feb lows.  On the downside, 0.6933/50 and 13th March resistance come as first support. A break of the 0.69 handle opens up the 0.6885 mark as being the recent lows guarding 0.6675 as the 29th May 2016 on a break of the 0.67 handle.