NZD/USD ticks higher to 0.6800 handle but lacks follow-through ahead of Powell
• The USD fails to build on its attempted rebound amid dovish Fed outlook.
• A slight deterioration in risk-appetite seemed to cap any meaningful up-move.
• Focus remains on a slew of Fedspeaks, especially from the Fed Chair Powell.
The NZD/USD pair broke out of its European session consolidation phase and refreshed daily tops in the last hour, albeit struggled to move beyond the 0.6800 handle.
After an initial downtick to an intraday low level of 0.6771, the pair regained positive traction and has now moved within striking distance of 2-1/2 week tops touched in the previous session.
The US Dollar struggled to preserve/build on its attempted rebound from three-month lows and was seen as one of the key factors behind the pair's modest uptick over the past hour or so.
The minutes of the Federal Reserve’s December meeting showed that several policymakers were in favour to hold rates steady in 2019 and kept a lid on any strong recovery for the greenback.
However, a slight deterioration in global risk-appetite, as depicted by a mildly negative tone around equities, extended some support to the buck's relative safe-haven status and might cap strong gains.
Meanwhile, the market reaction to the release of US initial weekly jobless claims, showing a larger than expected decline to 216K, turned out to be rather muted and failed to provide any meaningful impetus.
Moving ahead, today's scheduled speeches by influential FOMC member, with the key focus on comments by the Fed Chair Jerome Powell, might influence the USD price dynamics and infuse a fresh bout of volatility.
Technical levels to watch
Momentum above the 0.6800 handle might continue to confront some resistance near the 0.6815 region, above which the pair is likely to aim towards testing the 0.6870 horizontal level en-route the 0.6900 mark.
On the flip side, retracement further below the 0.6775-70 region might trigger some long-unwinding trade and drag the pair below mid-0.6700s towards its next support near the 0.6720 horizontal zone.