The NZD/USD pair has managed to recover early lost ground to the 0.7200 neighborhood and has now moved back closer to 2-1/2 month highs, around 0.72225 region.
The pair dipped during Asian session on Wednesday after New-Zealand reported a current account surplus of NZ$244 million in the first quarter of 2017, which although was much better-than a revised fourth-quarter deficit of $2.4 billion but fell short of consensus estimates. Adding to this, the annual deficit stood at NZ$8.1 billion versus a deficit of NZ$7.8 billion and weighed on the major.
The fall, however, turned out to be short-lived and the pair quickly recovered early losses amid weaker tone around the US treasury bond yields that failed to underpin the US Dollar demand and was seen lending support to higher-yielding currencies – like the Kiwi.
Later during the NA session, the US economic docket, featuring the release of latest CPI print and monthly retail sales data, would be looked upon for some trading impetus. However, investors’ focus will remain glued to the outcome of the two day FOMC policy meeting, where the central bank is widely expected to raise interest rates.
With the decision nearly priced in the markets, the pair seems more likely to continue gaining traction and a strong follow through momentum remains a distinct possibility.
Technical levels to watch
Immediate resistance is pegged near 0.7245 area (Feb. 23 high), above which the pair is likely to accelerate the up-move towards 0.7275 intermediate resistance en-route the 0.7300 handle. On the downside, the 0.7200 figure now seems to have emerged as immediate support, which if broken is likely to trigger a corrective slide even below 0.7170 (weekly low) towards 0.7145-40 area ahead of the very important 200-day SMA support near the 0.7100 handle.