- RBNZ aftershocks still in play as traders await fresh impulse to take a U-turn from 0.6800.
- Immediate ascending trendline at 0.6760 can offer nearby support.
NZD/USD trades near 0.6800 handle at the start of Thursday’s Asian trading. The quote lost more than 100 pips on Wednesday after RBNZ surprised global markets with a bearish bias. Traders now await monthly details of ANZ activity outlook and business confidence survey.
The Reserve Bank of New Zealand (RBNZ) surprised global markets with its dovish review of the official cash rate (OCR) by saying that “the more likely direction of our next OCR move is down”. Investors turned bear after the report and dragged the NZD/USD near 0.6800 from around 0.6920 ahead of the event.
Kiwi bears remained present through the day as the US Dollar was in demand based on its safe-haven appeal and also because of better than expected trade balance from the US.
Early on Thursday, New Zealand’s finance minister Grant Robertson tried to placate the market pessimism by praising the Kiwi economy’s strength to weather the global downturn. Though, traders gave little importance to the statement ahead of the ANZ data, up for 12:00 AM GMT.
Forecasts suggest ANZ activity outlook and business confidence are both could help the New Zealand (NZD) recover some of its latest losses. While the activity index is likely to post 11.8% against 10.5% prior, the business confidence may ease its earlier drop of -30.9 with -24.3.
NZD/USD Technical Analysis
100-day simple moving average (SMA) near 0.6815, followed by the 50-day SMA figure of 0.6830, are likely immediate resistances, a break of which propel prices towards 0.6870 and 0.6900 levels to the north.
On the downside, an upward sloping trendline since January 22 can please the bears around 0.6760 during further declines whereas 0.6700 could flash on their radar afterward.
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