NZD/USD remains subdue at 0.7080 despite positive terms of trade

Currently, NZD/USD is trading at 0.7078, down -0.05% on the day, having posted a daily high at 0.7090 and low at 0.7079.

NZD/USD is consolidating the sell-off from above the 0.71 handle at aforementioned lows in early Asia. The risk tone was poor overnight and the commodity bloc suffered from the price of oil in decline. WTI made an overnight low of $47.48bbls (before some relief in the API data showing a bigger draw) and iron ore was down 3%. The DXY was pressured lower despite bearish commodities while yields dropped below 2.20% in the 10 years. NZ Q1 terms of trade data were just released risk in 5.1% vs 3.9% but below prior 5.7%. For the day ahead, risk lies with Aussie retail sales and capex while the ADP report in the US session could be a positive prelude for nonfarm payrolls at the end of the week.

NZD/USD 1-3 month:  

Analysts at Westpac expect that the Fed’s tightening cycle plus US fiscal expansion should eventually reassert upside pressure on US interest rates and the US dollar, pushing NZD/USD below 0.6800 by year end. "US factors should outweigh local factors which are mostly supportive." 

NZD/USD's levelling 20 4hr sma at 0.7074 today that has been supporting the ascending channel. 0.7040, 0.7000, 0.6980 and the 50 daily sma at 0.6955 are the next key supports. Resistance is located at 0.7120 the high ahead of and 0.7148.