- NZD/USD has started the week in an opening bearish gap, falling to a low of 0.6824 with risk appetite closely correlated to the bird’s performance.
- NZD/USD is currently trading at 0.6834 with a high of 0.6840 and a low of 0.6824.
NZD/USD shifted gears on Friday and rallied from a low of 0.6765 to a high of 0.6850 on the back of a spike in risk sentiment after news that the PBoC will release another $37 billion in additional cash to banks for the purpose of stimulating growth, stocks in the US should continue in their positive trajectory.
“This week trade talks and the FOMC meeting will take the focus. We expect the Fed will be cautious, but not overly so, while signs of progress on trade would be positive for risk and may keep NZD supported. Watch for headlines,” analysts at ANZ Bank explained.
We expect NZD/USD to reach 0.61 by year-end – (ANZ)
The analysts at ANZ have noted that the RBNZ has adopted a cautious, neutral tone but continues to signal eventual rate hikes:
“In contrast, we now see the OCR as more likely to be cut. Market pricing will likely ebb and flow along with the data, particularly given volatility emanating from offshore at present. But ultimately, we expect that a more challenging domestic and global environment will eventually spur the RBNZ into action. A lower OCR and a more cautious Fed are expected to cap long-end yields, but nonetheless we expect recent outperformance of the long end to subside somewhat. As the market prices a lower OCR, this will weigh on the NZD (along with a challenging backdrop for risk currencies). “
NZD/USD levels
- Support 0.6670
- Resistance 0.6860
The price burst through the 200-D SMA and was supported by the 25th Nov pivotal low and confluence of the 21-D SMA as a hard support line, leaving a long bullish Marubozu Japanese candlestick. Bulls can target a break to 0.6848 at this juncture being the prior swing high. On the downside, break below the 21-D SMA would open the 23.6% Fibo.
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