FxWirePro: NZD/USD drifts lower ,could be on verge of bigger drop

• NZD/USD dipped on Thursday  as investors assessed  Iran peace deal hopes and stronger NZ trade balance data.

• New Zealand’s latest trade data showed a monthly surplus of NZ$1.9 billion in April, although the annual trade balance remained in deficit at NZ$2.8 billion, highlighting that external demand conditions are still mixed despite the strong monthly result.

•Market sentiment improved after Trump stated that negotiations with Iran were in their final stages, boosting hopes for reduced geopolitical tensions. However, his continued threats of potential military action kept investors cautious about the sustainability of the risk rally.

•On the US side, Federal Reserve meeting minutes revealed policymakers are becoming increasingly open to additional Fed Funds Rate hikes if inflation pressures remain persistent.

•The relatively hawkish tone continues to provide underlying support for the US dollar and limits broader upside potential for currencies such as the New Zealand dollar.

•  Immediate resistance is located at 0.5880(50%fib), any close above will push the pair towards 0.5895(SMA 20).

•  Support is seen at 0.5820(May 20th low) and break below could take the pair towards 0.5793(38.2%fib).

 Recommendation: Good to sell  around 0.5900 with stop loss of 0.5950 and target price of 0.5850