NZD/USD: Kiwi slightly boosted by Powell testimony
- NZD appreciates as Federal Reserve chairman Powell testifies in Congress
- NZD/USD rebounds from key technical level of 0.7160
The NZD/US is trading up 0.3% at around 0.7235 as Powell is testifying on Capitol Hill for the second day this week. So far there is no new information regarding the Fed rate hikes.
Earlier on Thursday PCE prices, the Fed’s preferred measure of inflation, increased to 0.3% over the month, though it stayed unchanged at 1.5% on year-to-year basis while initial jobless claims decreased. The US initial claims plummeted to a 48-year low of 210k. On a 12-month basis the PCE deflator remained steady at 1.7% y/y and still below 2% inflation target, the core rate is unchanged too, at 1.5% y/y.
The news of Chinese Caixin manufacturing PMI coming out slightly better than expected in February failed to promote antipodean currencies even with both New-Zealand and Australia being very closely related to the Chinese economy.
From a broader point of view, the divergent monetary policy is still in favour of the US Dollar as the Fed is likely to increase rates while the RBNZ is for now neutral.
Technically, the NZD/USD is rebounding from the 0.7160 level which formed a double bottom with the February 8 low. The next resistance is seen at 0.7275 which is the 61.8% Fibonacci retracement from the January 24 - February 8, bear leg. Further up, 0.7337 is the 50% Fibonacci retracement from the January 24-February 8 bear leg. To the downside, key resistance is at 0.7160 which is the double bottom low. Further down, 0.7100 figure is the next key support being a 50% Fibonacci retracement from the November 2017-January 2018 bull run.
NZD/USD daily chart
