NZD/USD: Volatile on 0.72 handle amid RBNZ jawboning & risk-on

Dhwani Mehta FXStreet

The NZD/USD pair witnessed two-way trading so far this Wednesday, as volatility remained quite high, leaving the spot swinging up and down in a 50-pips range.

NZD/USD: Lacks clear direction

The Kiwi moved away from daily tops of 0.7278 and reverted to the mid-point of 0.72 handle, having found support near 0.7230 in early Asia. The major remains torn between the latest round of currency jawboning by the RBNZ Governor Wheeler and a turnaround in risk sentiment, reflected upon rebounding Asian equities and higher Treasury yields.

The RBNZ Governor Wheeler said during his speech that a lower NZD is needed to increase tradables inflation and help deliver balance growth. Meanwhile, escalating fears over North Korea dissipated, offering some respite to the higher-yielding currency NZD.

Next of relevance for the pair remains the US GDP and ADP jobs report, as markets continue to cheer better NZ building consents data.

NZD/USD Levels to consider

NZD/USD failed above 0.7250 (natural resistance), with 0.7200 (round figure) still guarding 0.7153 (200-DMA) and a break back below 0.7100 (key support) are key near-term downside areas. To the topside, a test of 0.7278/81 (daily top/ 20-DMA) due on the cards, which could open doors towards 0.7342 (50-DMA).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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