NZD/USD consolidates as prospects of a break of 0.71 dwindle

Currently, NZD/USD is trading at 0.7036, down -0.10% on the day, having posted a daily high at 0.7057 and low at 0.7025.

NZD/USD is consolidated as markets remain steady lacking a firm a catalyst so far today. The bird has been losing its edge in the correction since the RBNZ left the Official Cash rate at 1.75%, and issued a statement that expressed a view that further NZD depreciation is needed, while simultaneously saying that inflation is expected to return to its 2% target over the medium term as explained by Kit Juckes, an economist at Societe Generale. "That could be read as either bullish or dovish but the rates market has reacted by increasing the implied probability of a hike in rate this year to almost 50%, and fully discounting a move by this time next year."

RBNZ is willing to tolerate higher inflation for a weaker Kiwi - Swissquote

Meanwhile, for today, markets had been expecting the results of the health bill votes, but the House Rules Committee Chairman Pete Sessions said earlier the vote could happen as early as Thursday or as late as Monday, according to a recent report by Reuters.

The House vote had been expected by about 7 p.m. (2300 GMT). But by midnight on Wednesday, lawmakers had not yet settled on the timing as conservative and moderate Republicans split on whether there should be additional changes to the proposal.

NZD/USD levels

0.7098 has been the upside target in the March correction but the market has anchored the bird and the case for a break of the 0.71 handle is dwindling. To the downside, 0.7010/20 and 0.6950/60 levels are the key supporting areas guarding 0.6880 and March lows. Should the correction pick up, the double-bottom of potential resistance at 0.7130 on the 4hr chart in mid-Feb and late Fed business. 0.7245 comes as the late Jan/early Feb support and double top resistance Feb 16th and 23rd.