- NZD/USD traders keep the 0.7000-0.7050 range in play.
- The US dollar bullish momentum is slowing down as investors are taking profits out of the table.
The NZD/USD is trading at around 0.7027 up 0.13% as the pair is mainly led by sentiment toward the US dollar.
The kiwi found intraday support just below the 0.7000 handle and is now hovering in the 0.7025 region which is a key support/resistance level used in the last four days of trading.
The US Dollar Index (DXY), which measures the greenback relative to a basket of currencies is seeing slowing its bullish momentum in the last three days of trading. The bull trend is strong and saw DXY jump from 89.23 to 92.97 in just 15 days. Investors are expecting the Federal Reserve to hike at least three times in 2018 as inflation and growth in the United States are on track.
This Monday is rich in Fed’s members' speeches, however, as they are rather academic in nature they are unlikely to stir the markets in any meaningful way. Additionally, since it is May Day in the United Kingdom there is less volume to move the markets.
Looking back, last Friday the Non-Farm Payroll came below expectations at 164K against 192K forecast by analysts while wage’s growth (average hourly earnings) also disappointed at 2.6% YoY against 2.7% forecast while the unemployment rate fell to 3.9% which is the lowest level since December 2000. Analysts argue, that despite the lowest reading in the NFP, the market expectations for policy normalization in the US remain high with at least 3 rate hikes in 2018.
NZD/USD 4-hour chart
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The trend is bearish and bulls are trying to find a floor at the 0.7000 handle. Supports are therefore seen at the 0.7000 level and at 0.6500 previous swing low. Resistances are seen at 0.7500 top of the four-day range and at 0.7096 swing high.
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