NZD/USD bulls eye 0.7022 through 20-d sma at 0.7014

Currently, NZD/USD is trading at 0.6979, up 0.23% on the day, having posted a daily high at 0.6983 and low at 0.6963.

• US dollar index reverses and tumbles after FOMC minutes
• Forex today: big turnaround post hawkish FOMC minutes, but why?

The focus in the US session was on the FOMC minutes, although prior to the release, the US data in jobs as a prelude to Friday's nonfarm payrolls was a positive and encouraging result. The ADP employment rose 263k in March vs. the 185k expected. However, the Kiwi rallied from the ADP losses at 0.6950 on the back of the FOMC minutes. The minutes were hawkish, as expected, but the market expects that tapering will be negative for risk sentiment and we saw a subsequent sell-off in stocks, the dollar and a drop in yields. Investors now await further developments from forthcoming key events this week with US President Trump meeting with his Chinese counterpart Xi Jinping and indeed the nonfarm payrolls at the end of the week.

Analysts at Westpac offered their view for NZD/USD on a 1-3 month outlook:  

"Potential for 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. (21 Mar)."

NZD/USD levels

 On the upside, a break of 0.6980 opens up the 20-d sma at 0.7014 and 3rd April high of 0.7022 that guards 0.7080 and the 200-d ema. 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 looks to 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.