- US Dollar Index struggled to find direction on Tuesday.
- RBNZ expected to keep policy rate unchanged at 1.75%.
The NZD/USD pair is fluctuating in a 30-pip range on Tuesday as investors are refraining from making large bets ahead of the RBNZ’s policy announcement in the early trading hours of the Asian session on Wednesday. As of writing, the pair was virtually unchanged on a daily basis a few pips above the 0.69 handle.
Previewing the RBNZ’s March meeting, “With inflation expectations anchored just above 2% and maximum sustainable employment achieved, there are no triggers for the RBNZ to change its February stance where the next cash rate move “could be up or down”, and that the cash rate is likely to stay “unchanged through 2019 and 2020,” said TD Securities analysts. Earlier today, the data from New Zealand showed that the trade deficit in February rose to $6.62 billion on a yearly basis.
On the flip side, the US Dollar Index, for the second straight day today, stays quiet near mid-96s as markets continue to assess the high volatility in Treasury bond yields. The 10-year yield on Tuesday is staging a strong recovery by adding more than 1% but doesn’t seem to have a notable impact on the greenback’s market valuation.
Technical levels to watch for
The pair could face the initial support at 0.6895/0.6900 (daily low/psychological level) ahead of 0.6870 (Mar. 25 low) and 0.6840 (50-DMA). On the upside, resistances could be seen at 0.6940 (Mar. 21 high), 0.7000 (psychological level) and 0.7050 (Jun. 13 high).
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