NZD/USD: eyes on 0.7435 daily high double top on closes above 0.7360

• NZD/USD struggles again with the 21-D SMA.
• NZD/USD: will risk-on sentiment help the bird to a higher perch today?

NZD/USD is currently trading at 0.7295 with a high of 0.7297 from a low of 0.7288. The risk-on sentiment has improved over this last week and there has been a strong reversal of the 26th Feb supply with the greenback trading mixed.

Mixed dollar tone, macro backdrop is benign - BBH

The US dollar has been reincarnated a number of times over the last number of weeks and the Kiwi has been caught up tracking commodities and the Aussie in the absence of much in the way of domestic data, maintaining its resilience for the year so far. 

Ins and outs of the Kiwi

Analysts at ANZ noted that its strength has been in the face of the disappearance of interest rate differentials versus the US, higher volatility on global markets, and the recent threats of global trade wars:

"Elevated commodity prices, a still decent domestic growth signal, and relatively robust structural metrics (by New Zealand’s standards at least and with the exception of household debt) perhaps explain this resilience. However, the USD is also out of favour currently due to concerns over its ‘twin deficits’ – large and increasing deficits on both the fiscal and trade fronts – and it has been this theme that has arguably been the biggest driver. But we are not convinced this will persist, particularly as global liquidity continues to tighten, which should eventually put the NZD back on the defensive," the analysts at ANZ explained.

NZD/USD levels

Technically, however, there is an argument that the chart is still leaning bearish with repeated recovery failures on the 0.73 handle. The price struggles with the descending 21-D SMA at 0.7296 but a break there would open the way to 0.7360 as the key upside target in the near term to open a run towards 0.7435 daily high double top.