The NZD/USD is having a difficult time determining a near-term direction during the NA session. Despite the US dollar index’s attempt towards the 99 region, the recovery seen in U.S. stocks is limiting the downward momentum on the pair. At the moment the NZD/USD is up 0.34% at 0.7050.
Following Friday’s defeat, markets are worried that Trump’s coming agenda items such as the tax reform, deregulation and increased spending could take longer to pass through the Congress than initially thought. “In the wake of Friday’s healthcare debacle, Trump tweeted ironic congratulations to the Freedom Caucus for saving Obamacare and is reaching out to Democrats. Markets are shaken, to say the least, at the possible end of the Trump trade,” said Chris Low, chief economist at FTN Financial, in a note.
For the rest of the week, the NZD/USD is poised to be driven by the greenback as the economic calendar won’t be offering much for the NZD.
NZD/USD is likely to be mainly a reflection of USD behavior – Westpac
The 61.8% Fibo retracement of the Jan/Feb rise at 0.7060 remains as a significant resistance as the pair continuously failed to close the day above that level. The next hurdle is located at 0.7120 (Fib. 50%) followed by 0.7155 (200-DMA). On the downside, supports could be found at 0.7000/0.6990 (psychological level/20-DMA), 0.6925 (Mar. 15 low) and 0.6890 (Mar. 9 low).