NZD/USD: Oversold readings save the day for the NZD

• New Zealand trade deficit neared decade high in the March quarter.
• Still, Kiwi is mildly bid today, possibly due to oversold technical conditions.

The news flow in the last 12 hours has been anything but encouraging for the NZD.

The New Zealand trade deficit in the March quarter neared a decade high of $1.8 billion in the March quarter, according to Stats NZ. Further, the Q1 deficit has been the 16th consecutive quarterly deficit since the March 2014 quarter.

Meanwhile, the Fed statement gave no indication that officials plan to raise rates faster than previously expected, however, the language did show more confidence in inflation trends. Still, the USD hasn't found takers as analysts believe a modest overshoot on inflation would be tolerable.

More importantly, the oversold conditions as represented by the daily relative strength index (RSI) are likely helping the NZD/USD move back above 0.70. As of writing, the currency pair is trading at 0.7007.

NZD/USD Technical Levels

A break above the descending 0.7032 (hourly 50-MA) would open up upside towards 0.7050 (hourly 100-MA) and 0.7095 (April 26 high). On the downside, a close under 0.70 (psychological support) could yield 0.6954 (Dec. 20 low) and 0.6945 (Nov. 28 high).