NZD/USD: stuck in familiar range unable to take off on US data misses
- NZD/USD continues to find support at 0.6870/90
- NZD/USD upside target is 0.6942 through 0.6900 resistance.
NZD/USD bulls were unable to capitalise on the US data misses on Tuesday and bears are taking back control with multiple tests of the 0.6870/90 support area. NZD/USD is trading at 0.6875, up 0.34% on the day, having posted a daily high at 0.6909 and low at 0.6850.
NZD/USD drifted higher from 0.6872 to 0.6900 during the European am with little to go on domestically overnight in Asia apart from Spencer saying that RBNZ has become more flexible on inflation targeting. However, NZD/USD has been unable to run away with the bid given the favouritism for US assets and a strong dollar as the US Senate improved a major tax overhaul over the weekend while the FOMC is also expected to hike interest rates next week.
while markets await the US ADP report as a prelude to the forthcoming NFP's data on Friday ahead of next week's FOMC expected rate rise, the US Markit’s services PMI and the ISM non-manufacturing dropped in November to 54.5 (vs 55.4 expected) and 57.4 (vs 59.0) respectively.
- US: Non-manufacturing sector grew at a slower rate in November - ISM
- US: Service sector output expansion softens to 5-month low - Markit
- Support 0.6860/90
- Resistance 0.6910/20
NZD/USD's lower level supports start at 0.6840 ahead of 0.6815-20 guarding a break of the 0.68 handle towards the 17-month low level of 0.6780. However, the strong recovery last week as a 50% recovery left the pair neutral, (daily RSI and The Momentum indicators confirming a neutral outlook still), just below the 200-hour SMA at 0.6879. The key target to the upside stays with the 28th Nov double-top highs of 0.6942.