NZD/USD breaks higher, fails to capture recent highs

• RBNZ asst gov McDermott gives the NZD a brief push upwards back into recent highs.
• Risk appetite remains restrained as the Middle East threatens further destabilization and a further breakdown of UN communication.

The Kiwi lifted in the overnight session to the 0.7375 area following a speech from the Reserve Bank of New Zealand's (RBNZ) Assistant Governor, John McDermott.

The RBNZ's McDermott touched on the RBNZ's recently-widened mandate, which now includes employment stability on top of inflation,  a move that brought the central bank's operational targets in-line with other central banking institutions around the globe. McDermott stated among other things that the expanded mandate will help the RBNZ to achieve their ultimate goal of price stability moving forward. The NZD/USD responded positively to McDermott's speech, lifting into Wednesday's highs on his rhetoric.

Further reading: employment mandate will help inflation targeting flexibility - RBNZ's McDermott

The bullish risk-on stance that broader markets hit the week with is beginning to fade as Syria becomes a point of focus once more in the Middle East. Allies within the UN are reacting negatively to a chemical weapons attack over the weekend, and attempts by the US and other powers to strike back at Syrian forces over the use of the weapons is facing pushback from the Russian regime, which backs the embroiled Syrian President, Bashir al-Assad.

NZD/USD Levels to watch

The overnight session's run-up is facing challenges at the outset of the Tokyo trading session, and as FXStreet's own Flavio Tosti noted earlier, "the NZD/USD broke above 0.7355 swing high made on March 13. The market is currently consolidating close to the highs made earlier in Asia at 0.7377. Support lies at 0.7346 and at 0.7323 swing high."