NZD/USD bulls step in at key hourly support into Chinese data

• NZD/USD bulls step in as the bears start to move out. 
• The price is held up at familiar support as traders await fresh catalysts. 

NZD/USD is remaining in a flat position in a calm Asian session. At the time of writing is trading at 0.6945 after going from a top of 0.6945 and a low of 0.6937. There is a shortage of catalysts until the US session's Federal Open Market Committee minutes, but Chinese data will be monitored.

Overnight, it was a story about the US currency and yields. Federal Reserve Governor Lael Brainard frightened the markets when she warned about possibly aggressive steps by the Fed and in expectation of hawkish minutes tomorrow.

the Fed member said that the central bank might start lowering its balance sheet as soon as May and would be doing so at “a fast pace.”

She also signaled that interest rate rises might occur at a more aggressive pace than the customary increments of 0.25 percentage points.

As a result, the US Treasury rates surged to multi-year highs and the DXY, an indicator that measures the dollar vs a basket of currencies, went up to challenge 99.50 to post a new high for 2022 at 99.493.

Meanwhile, the Fed policymakers started the process of policy normalization by hiking rates 25bp to 0.25 percent -0.50 percent at the March meeting and on Wednesday the minutes of that meeting will be disclosed.

''The FOMC pull no hawkish punches in its policy advice, with Chair Powell also implying additional information regarding QT intentions would be published in the minutes (perhaps including caps specifics) (possibly including caps details). We continue to anticipate a formal QT announcement at the May FOMC meeting,'' analysts at TD Securities said.

Coming up, the Chinese data is coming up. ''The March Caixin/Markit services PMI should highlight deterioration in the sector on account of poor demand and increased input prices,'' analysts at Westpac said.