NZD/USD consolidates within the  sideways channel with a technical bullish bias to 0.6920

• NZD/USD consolidates within the  sideways channel, but daily  RSI has started to drift higher into  a more  positive  territory.  
• However, there does not seem to be a lot of conviction to moves at present, with markets awaiting key central bank decisions this week.

NZD/USD was having an up day within the broader sideways July  channel between 0.6687 and 0.6858, having made a high of 0.6835 and 0.6791.

NZD/USD is currently trading at 0.6822 and is consolidating the  corrective selling in the greenback, (despite the GDP data pointing towards a more aggressive rate path from the Fed) after the CNH failed to break new ground. Equally,  positive NAFTA comments around progress being made are cooling trade war fears.

“The kiwi drifted a little higher overnight most likely on month-end flows. There does not seem to be a lot of conviction to moves at present, with markets awaiting key central bank decisions this week (including the BoJ today),” as analysts at  ANZ Bank New Zealand Limited,  (ANZ) explained. The analysts see the NZD testing modestly higher in time, but the 0.6850-60 zone is a nice cap right now.  

Market pricing for RBNZ rate hikes remains subdued

Analysts at Westpac explained that with a full hike not priced until March 2020, market pricing for RBNZ rate hikes remains subdued. Indeed, pricing continues to flirt with a bp or two of rate cuts early 2019. The slowing NZ economic growth story has motivated some traders to re-establish received positions, the roll-down benefit on short-end received swaps at slightly over 1bp per month.

NZD/USD levels

Support is located at 0.6720 and resistance remains located at 0.6860. Bulls have not been able to sustain a meaningful bid away from the 10 and 21-D SMAs converging around 0.6780, but price action today has been the most bullish since 24th July where the pair made a top of 0.6846.  RSI has started to drift higher into  a more  positive  territory.  A break of 0.6920, the June highs, will come into focus. The 200-month moving average resistance at 0.7009 is the next key level while a break to the downside below the 10 and 21-D SMAs opens 0.6720 and then 0.6680.