- NZD/USD bounces from crucial support as RBNZ revises unconstrained OCR forecast higher.
- The Jan. 6 high of 0.7315 is the level to beat for the sellers.
NZD/USD clocked a high of 0.7384 soon before press time – the level last seen in April 2018. The pair defended the former hurdle-turned-support of 0.7315 (Jan. 6 high) early today, even though the Reserve Bank of New Zealand (RBNZ) expressed willingness to provide more stimulus and stressed its ability to implement negative rates if needed.
However, the central bank lifted its forecast for the unconstrained OCR, the rate needed to achieve its targets for inflation and unemployment, supporting the case for withdrawal of stimulus in 2022, as noted by Capital Economics in their RBNZ policy review.
That likely put a bid under the NZD, pushing NZD/USD to fresh multi-year highs above Tuesday’s high of 0.7347.
The daily chart now shows the Relative Strength Index breaking out of its descending channel. As such, further gains could be seen.
The immediate bias would turn bearish if the pair fails to keep gains above the Jan. 6 high of 0.7315.
Daily chart
Trend: Bullish
Technical levels
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