NZD/USD steady ahead of Fed minutes & NZ budget release

The NZD/USD is trading steady around 0.6925 levels this Monday morning as the traders look forward to the release of the Fed minutes on Wednesday and NZ election year budget release on Thursday.

The pair recovered from the low of 0.6881 on Friday as the offered tone around the US dollar gathered pace after St Louis Federal Reserve president James Bullard; a renowned dove; said that the Fed's projected path for interest rates was "overly aggressive relative to actual incoming data on US macroeconomic performance".

However, the recovery from Friday’s low of 6881 has stalled around 0.6940 as dovish comments from Fed’s Bullard failed to shake the market's conviction that the Fed will hike next month. The odds of a 25bps June rate hike have improved to 78% from the last week’s low of 64%.

The Fed minutes due this Wednesday are likely to offer insight into the likelihood of higher interest rates in the months ahead.  Meanwhile, Thursday’s NZ election year budget could move the NZD pairs.

NZD/USD Technical Levels

A break above 0.6961 (50-DMA) would open up upside towards 0.6983 (Apr 21 low) and 0.70 (zero figure). On the lower side, support of 5-DMA at 0.6914, if breached, could yield a pullback to 0.6881 (previous day’s low) and 0.6839 (May 4 low).

Note the daily MACD turned bullish last week, although the RSI is yet to break above the neutral (50.00) levels.