NZD/USD meltdown goes on, 0.6950 in sight

• NZD/USD meltdown continues as the USD is boosted by Powell’s hawkish remark.
• Trump is set to announce its decision on the Iran nuclear deal at 18:00 GMT. 

The NZD/USD is trading at around 0.6960 down 0.80% in Tuesday’s trading. 

The kiwi is continuing its downslide as investors rushed to the US dollar once again after Jerome Powell, the Federal Reserve chairman made some very hawkish comments earlier in the day. He said that “some investors and institutions may not be well positioned for anticipated US interest rate hikes” and the greenback rose across the board.

The US Dollar Index (DXY) which measures the buck relative to a basket of currencies jumped to monthly highs beaking the 93.00 psychological level and reaching 93.28 in the US session. 

In the near term, the market will shift its focus to the Trump’s decision about the Iran nuclear deal. Although some volatility can be expected given the geopolitical ramifications, it is unlikely to reverse the US dollar bull trend as the market is mainly focused on the policy normalization as the Fed is expected to hike at least three times in 2018.

NZD/USD 4-hour chart 

“Immediate support is pegged near the 0.6965-60 region, below which the pair is likely to accelerate the slide towards the 0.6915-10 support area. On the upside, any meaningful recovery attempt back above the 0.70 handle might continue to confront fresh supply near the 0.7035-40 region, which if cleared might trigger a short-covering bounce back towards the 0.7090-0.7100 barrier.” wrote FXStreet’s own Harsh Menghani.