NZD/USD: meeting trend line resistance and failing below 0.73 handle

Currently, NZD/USD is trading at 0.7285, down -0.07% on the day, having posted a daily high at 0.7294 and low at 0.7283.

Within a range of 0.7255-0.7297, NZD/USD has met supply below the 0.73 handle and minor recoveries struggle to find a footing in the 0.790’s at trend line resistance from 0.7303. The bird has been trading in reaction to US market developments while lacking domestic catalysts and all eyes have been with the FOMC June minutes.  

The FOMC minutes offered the following key points:

  • Most Fed policymakers viewed recent softness in inflation data has had little bearing on inflation trend -minutes from June 13-14 meeting. 
  • Several Fed policymakers saw a recent increase in import prices as consistent with inflation rising in the medium term.
  • Several Fed policymakers were concerned recent softness in inflation might persist due to limited pass-through from resource utilisation.
  • Several Fed policymakers wanted to announce start of balance-sheet trimming within a ‘couple of months,’ others wanted to wait until later in 2017 
  • Fed Chair Janet Yellen suggested announcing a new approach to balance sheet plan at June 13-14 meeting.
  • Fed policymakers discussed possible reasons why financial conditions had not tightened following hikes in fed funds rate. 
  • Almost all Fed policymakers supported June hike; one wanted to wait until inflation rose.

NZD/USD levels

The bird is potentially stalling within the upward bull channel meeting trend line resistance at 0.7299 (July 4 high); ahead of 0.7345 July 3 high; 0.7376 Feb. 7 high; 0.7393 Nov. 9 high. Supports are seen at 0.7250 June 23 low; 0.7205/06 June 22/21 lows; 0.7186 June 15 low; 0.7150 June 5 high; 0.7127 June 6 low.

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