NZD/USD pulls back from seven-week low

The NZD/USD, after refreshing its lowest level since Jan. 11 at 0.7015, put together a recovery in the last two hours, erasing most of its daily losses. 

RBNZ is worried about strong NZD

According to the data released by Statistics New Zealand, the country ran up a small trade surplus in the 2016 calendar year, as total exports increased to 70.01 billion NZD. However, encouraging US economic data and hawkish comments from FOMC members continue to help greenback preserve a bullish tone, putting the pair under pressure.

Furthermore, RBNZ Governor Wheeler, earlier this week, stated that biggest risks on the economy are linked to housing and high NZD. He also added that whether monetary easing would be required to offset high NZD depends on the factors driving the exchange rate.

The most anticipated event of the day, J. Yellen’s speech on ‘Economic Outlook’, could be the next catalyst for the pair before we wrap up the week. Additionally, US ISM Non-manufacturing data accompanied by speeches from Chicago Fed C.Evans (voter, dovish), Richmond Fed J.Lacker (2018 voter, hawkish), J.Powell (permanent voter, centrist) and Vice Chairman S.Fischer (permanent voter, centrist) will bel closely watched by the participants.

Technical outlook

At the moment the pair is losing 0.30% at 0.7045. The RSI indicator on the daily graph is sitting around 30, displaying oversold conditions. Upside barriers for the pair are aligned at 0.7055 (Fib. 61.8% - Fed. – Dec. Uptrend), 0.7120 (Fib. 50%) and 0.7170 (200 DMA). On the other hand, supports could be found at 0.7015 (seven-week low), 0.7000 (psychological level) and finally 0.6970 (Fib. 78.6%).