- DXY continues to climb toward the critical 95 handle.
- RBNZ is expected to keep the policy rate unchanged at 1.75%.
The NZD/USD pair is now on track to close the third straight day of this week with losses as the greenback strength continue to weigh. In the last hour, the pair touched its lowest level since November 2017 at 0.6797 and was last seen trading at 0.6802, where it was down 60 pips, or 0.85%, on the day.
After starting the week on a weak note and easing below the 94 mark, the US Dollar Index staged a robust recovery today boosted by the positive developments surrounding the United States’ trade policy. Furthermore, today’s data showed that the trade deficit in the U.S. decreased to $64.85 billion in May from $67.34 billion in April, providing an additional boost to the buck. The DXY is now at 94.82, up 0.5% on the day.
At the beginning of the Asian session, the RBNZ is going to announce its monetary policy decisions. “We expect the OCR to remain at 1.75% (as does unanimous consensus), the Governor to muse up front that the next move could be “up or down” as per the May policy assessment, and confirm that “this level” will remain for a “considerable period of time”,” TD Securities analysts wrote in a recently published report and adding:
“Be aware, however, that Orr may not just tweak one word or two, he could possibly re-write the whole thing.”
Technical outlook
The initial support for the pair aligns at 0.6785 (Nov. 21 low) ahead of 0.6700 (psychological level/May 31, 2016, low) and 0.6620 (Mar. 10, 2016, low). On the upside, resistances could be seen at 0.6850 (daily high), 0.6900 (psychological level) and 0.6950 (50-DMA).
Share
