NZD/USD making minor correction on FOMC sell-off

NZD/USD has been in recovery since traders smashed the bird lower on the back of the FOMC minutes.

NZD/USD dropped from the 0.68 handle ahead of the minutes, down through 100 sma on the hourly at 0.6788, then the 20 sma at 0.6765 and simply kept going until 0.6741 where there was some traction before further selling to 0.6724 and a subsequent recovery meeting the vicinity of the 10th of May lows at 0.6716. There has been a recovery from the lows to 0.6756 and current spot.

The minutes were fully summed up here, by Nomura: FOMC minutes: full review - Nomura

However, June is essentially back on the agenda. The minutes showed that most officials saw June hike 'likely' if economy warranted. This fuelled speculation, especially after the recent surprises in CPI and hawkishness from Fed speakers Lockhart and Williams yesterday that June is indeed a live meeting. However, the minutes also highlighted risks and some cited Brexit and China as risks along with the projection for inflation that were still judged as weighted to the downside, but that was before the better than expected CPI results earlier this week.

NZD/USD levels

NZD/USD remains in bearish grounds below the 4hr 20 sma at 0.6786. The 10th May lows at 0.6716 remain compelling in the vicinity of meeting with the 100 dma while breaking away below channel rising support. The 200 dma stands at 0.6644 as a key target ahead of 0.6580 key support. To the upside, the 55 dm stands at 0.6820 as putting the bird back into the rising channel.