Kiwi Dollar Eyes Key Support Ahead of Bullish Reversal

The New Zealand Dollar (NZD) inched higher against the US Dollar (USD) on Monday, during the Asian session, increasing the price of NZDUSD to more than 0.6880 as the new week kicks off. The technical bias remains bullish because of a Higher High in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded near 0.6687, a hurdle may be noted near 0.6694-0.6700, the confluence of psychological number as well as a major horizontal resistance ahead of 0.6773, the high of March 11 as demonstrated in the following daily chart.

On the downside, the pair is likely to find a support near 0.6671, the horizontal support ahead of 0.6575, the swing low of the last major downside move. The technical bias will remain bullish as long as the 0.6575 support area is intact.

Fed Monetary Policy Outlook

The Federal Reserve policy statement last week appeared to rule out any imminent rate hikes, but recent hawkish statements by Federal Reserve officials have surprised the markets and sent the US dollar broadly higher. On Monday, John Williams, president of the San Francisco Fed, said that the Fed could raise rates in April and June, if economic conditions improve. Although the dot plot an FOMC projection of rate hikes was lowered at the March meeting, he insisted that the Fed had not changed its path of rate hikes. His comments were echoed by Atlanta Fed Dennis Lockhart, who also said that an April rate move was a clear possibility. Lockhart noted that the US economy was holding up well, despite weak global conditions.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair near any of the above mentioned support levels could be a good strategy if we get a valid bullish reversal candle on four-hour timeframe.