NZD/USD challenging 0.7040 post-US data

• The Personal Consumer Expenditure (PCE) price index rose 1.9% y/y in March matching analysts expectations but fails to give the greenback a significant boost.
• The FOMC on Wednesday is the next salient event on the traders' radar.
• The NZD/USD is trading in a range between the 0.7040 and 0.7100 level.

The NZD/USD is trading at around 0.7046 down 0.55% in Monday's trading as the London's forex session is about to come to an end. 

The US Dollar is on a bull run. However, since last Friday bulls are not pressing their USD long bets on the release of US macroeconomic data. Recently the release of the Gross Domestic Product on Friday, which came above expectations, and the Personal Consumer Expenditure (PCE) data (on Friday and Monday), in line with consensus failed to provide any meaningful reaction in the buck. 

Wednesday’s Fed’s Monetary Policy Statement also known as FOMC meeting will be closely watched by investors who want to know if a rate hike is on the cards in June. If the Fed fails to convince the market and blame market conditions or rising US Treasury yields there is a risk that investors sell USD.

The US Dollar Index (DXY) is trading sideways in the 91.80-91.90 range in Monday’s trading. The prospects of peace between North and South Korea favors risk-on mood and the USD. However, the US Treasury yields are trading lower close to 2.950%.

Earlier in the day the Chicago Purchasing Managers Index, Pending Home Sales and the Dallas Fed Manufacturing Business Index all came below consensus providing a small rebound on NZD/USD.

Overnight, in New Zealand, the ANZ business confidence fell to a three-month low at -23.4 in April from -20 reported last month, further adding to the already fragile sentiment on the NZD currency.

NZD/USD daily chart

The trend is bearish. Immediate support is seen at 0.7039 low of last week and at 0.6954 swing low while resistance is seen at the 0.7100 handle and at the 0.7153 swing low.