NZD/USD trims post-FOMC losses to 0.6620, New Zealand building permits in spotlight

• Fed’s Powell provided powerful U-turn to the greenback.
• Profit-booking takes place ahead of domestic data.

NZD/USD is recovering post-FOMC losses to trade near 0.6620 at the start of the Asian session on Thursday. The Kiwi pair dropped heavily after upbeat comments by the Fed’s Powell triggered across the board strength of the US Dollar (USD). New Zealand building permits are next up in the line to watch.

Despite low volume on holiday-thinned trading, the New Zealand Dollar (NZD) has a bitter day on Wednesday. The currency initially lost as sluggish employment data at home strengthened odds for RBNZ’s rate cut in May but the downside was magnified after the Federal Reserve Chairman Jerome Powel favored economic progress, avoided providing signals that can lead to a rate cut and also termed inflation moves as a result temporal factors in Q1.

While a powerful performance by the Fed’s Powell made the greenback the G10 king on Wednesday, markets seem taking a U-turn at the beginning of Thursday’s Asian hours as traders recover profits after a volatile session.

Next up in the Kiwi traders focus will be March month seasonally adjusted building permits data from New Zealand. The housing market indicator can become another stroke to the weak if matching -1.6% forecast versus +1.9% previous growth.

At the US, weekly initial jobless claims, monthly factory orders and quarterly figures of nonfarm productivity and unit labor costs could entertain the USD traders with overall positive consensus favoring sustained strength of the greenback.

Technical Analysis

Recent low near 0.6580 can act as immediate support, a break of which can open the door for the pair’s drop to 0.6520 and 0.6490 rest-points.

Alternatively, 0.6650 and a five-week-old descending trend-line at 0.6675 may restrict near-term upside ahead of 0.6710 and 200-day simple moving average (SMA) level near 0.6730.