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1 Feb 2018
NZD/USD: consolidates ahead of Tokyo open, Chinese data eyed
NZD/USD has been steady in early Asia as we approach the Tokyo open where markets will await the Chinese manufacturing data. Currently, NZD/USD is trading at 0.7370, up 0.02% on the day, having posted a daily high at 0.7373 and low at 0.7359.
The main event overnight came from US FOMC outcome and statement where the FOMC recognised firm wages for a breadth of momentum as analysts at Westpac note:
- FOMC leaves the stance of policy unchanged as expected - Westpac
With the market short kiwi, as a result, the bird was able to grind higher on USD weakness and month-end rebalancing. "Admittedly, there was some respite once 74 cents was breached as markets jostle ahead of the FOMC. Up around these levels we still believe things look stretched, but it remains at the whims of global forces," analysts at ANZ explained.
US data
Elsewhere, the US Jan ADP National Employment arrived at 234k, vs185k Reuters forecast of and vs the 250k previous, (242k revised). US Jan Chicago PMI came in at 65.7 vs the 64.1 expected and 67.6 previous, (67.8 revised). US Dec Pending Homes Index followed in at 110.1 vs 109.5 previous, (109.6 revise.
NZD/USD levels
NZD/USD's blue sky rally has been capped and the price has been consolidating between 0.7320 a0 and recent highs of 0.7420. However, a break lower below the 0.73 handle looks to the 16th Jan double bottom of 0.7230/40 guarding 0.7120. To the upside, bulls need to be clearing 0.7450 previous top of H&S shoulders that then opens 0.7520 July 2017 highs.