NZD/USD: NZD/USD up 0.03% on the day as bulls come to rescue post down day on Yellen

Currently, NZD/USD is trading at 0.7167, up 0.03% on the day, having posted a daily high at 0.7171 and low at 0.7163.

NZD/USD is riding a bullish wave in a minor correction of losses from above the 0.7360 mark earlier along the hourly chart's sticks with a break below the 50 1hr sma at 0.7180 occurring overnight.

Yellen fuelled the bear's fire with a rally in the dollar in response to hawkish comments that leaves the door ajar for a March hike. Yellen delivered her "Humphrey Hawkins" testimony before the Senate Banking Committee today. She will also make an appearance before the House Financial Services Committee tomorrow.

• Fed's Yellen: Some policies being discussed in Washington may raise deficits or help productivity
• Fed's Yellen: Will wait to gain further clarity on economic policy changes
• Waiting too long to tighten would be unwise - Fed's J.Yellen
• More rate hikes may be appropriate in upcoming meetings - Fed's J.Yellen
• Fed's Yellen agrees with core principles of Trump's executive order on financial reform

For today, the downward correction of the Dec-Feb rally remains in progress and analysts at Westpac are targeting the 0.7120 area next.

NZD/USD 1-3 month:  

The same analysts suggested that the month ahead could see NZD/USD extending beyond 0.7500 (Sep high) if the US dollar continues to register disappointment in the Trump Administration’s policies. "Further ahead, though, the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD lower to 0.7000. Granted, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar’s trend."

NZD/USD levels

The bullish bounce has removed some of the immediate bearish pressures where otherwise risks are to the smoothed-ma on the same time frame located currently at 0.6987 on the wide in a 90% reversal of the Dec bullish trend from 0.6860. We then have the Nov double bottom in the same location and thus could be a tough area of support. On the flip side, a break though 0.7200 would pen risk towards the recent highs of 0.7374 of 6th of Feb.