NZD/USD double top, a sell on rallies to 0.7100?

Currently, NZD/USD is trading at 0.6988, down -0.05% on the day, having posted a daily high at 0.6998 and low at 0.6988.

NZD/USD has made a double top at the 4hr 200 sma this year so far, with the MA currently located at 0.7031 with a high of 0.7046 in yesterday's business. The kiwi has got momentum on a longer time frame that opens up the possibility of a test of 0.7100 meeting 14th Dec's sell-off post the FOMC decision to hike rates for the second time in about a decade, albeit with a renewed hawkish tone and extension to the dot plot for 2017.

Trumponomics: Shame is the Game - Dent Research

This optimism could soon come back into play if Trump manages to deliver a positive start this month and markets back the US economy as a safe haven offering an opportunity for yield. "Fed funds futures pricing was little changed, continuing to price in a 100% chance of a hike by June and another by November," explained analysts at Westpac.

NZD/USD 1-3 month:

The analysts suggested NZD/USD is headed lower to at least 0.6800. "The US dollar has had an impressive rise since the US election and has potential to rise further during the months ahead. The Fed's assertive tightening projections plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar's trend.

NZD/USD levels

With spot trading at 0.6988, we can see next resistance ahead at 0.6991 (Daily Open), 0.6993 (Hourly 100 SMA), 0.6997 (Hourly 20 EMA), 0.6998 (Daily High) and 0.6999 (Daily Classic PP). Support below can be found at 0.6988 (Daily Low), 0.6981 (Daily 20 SMA), 0.6967 (Hourly 200 SMA), 0.6964 (Weekly Classic PP) and 0.6964 (Daily Classic S1).