NZD/USD probing 2-week tops near 0.6930, what’s next?
- NZD is the strongest currency in Asia.
- USD recovery fizzles.
- Eyes on Fed Powell’s testimony and RBNZ Financial Stability Report (FSR).
The bid tone around the New Zealand dollar grew bigger in Asia, now pushing NZD/USD to the highest levels in two weeks, beyond which a test of the 50-DMA resistance at 0.6967 will be imminent.
NZD/USD poised for further upside
The spot extends its solid rebound staged yesterday and now remains on track to regain 0.70 handle, as the bullish break on the daily sticks remains supportive of the renewed upward bias.
Moreover, the risk remains on the upside in the day ahead, as markets do not rule out a position-related squeeze, especially with the month-end flows playing a major driving force.
Further, the Fed Chair-Designate Powell’s testimony is expected offer little impetus to the USD, which could add to the upbeat tone seen around the major.
However, it remains to be seen if the major can regain the 50-DMA barrier ahead of the RBNZ FSR due out later on Tuesday. In the meantime, the broader market sentiment will drive the pair, in absence of first-tier US macro releases.
NZD/USD Levels to consider
The spot finds support at 0.6900/0.6898 (daily pivot/ 5-DMA), below which 0.6863 (10-DMA) and 0.6800 (round number) are key near-term downside areas. To the topside, a break above 0.6967 (50-DMA) could open doors towards 0.7000 (zero figure).