The kiwi enjoyed the fresh hopes in Europe and recovered some of its losses. It remains capped by resistance. Will it continue higher or fall from here? The rate decision is the major event this week. Here’s an outlook for the events in New Zealand, and an updated technical analysis for NZD/USD Last week revealed encouraging figures such as the NBNZ Business Confidence rising to 18.3 from13.2 in October and Building Consents climbing 11.2% after 17.2% decline in September. Will this trend continue? Updates: NZD/USD started the week around the same levels. The Merkozy agreement announcement sent the pair temporarily above 0.7825, but this was short lived. NZD/USD weakened after the Australian rate cut and also due to the S&P warning over all euro-zone countries. It is under 0.78. The positive Australian GDP helped the kiwi, but the fresh European worries weigh on it. It remains in a tight range before the RBNZ decision later on. NZD/USD cannot escape the big ECB disappointment and falls out of the high range to 0.7723. NZD/USD dropped more on the disappointments from the EU summit and the slowdown in China but then recovered, back above 0.77. NZD/USD daily chart with support and resistance lines on it. Click to enlarge: Rate decision: Wednesday, 20:00.New Zealand’s central bank maintained its interest rate at 2.5% amid lower inflation and the European debt crisis. Governor Alan Bollard announced that cash rate may be increased in case the European debt crisis will not affectNew Zealand economy but in light of the current downside risk it was decided to keep rates on hold. Base rate is expected to be maintained. RBNZ Press Conference and Monetary Policy Statement: Wednesday, 20:00. The Reserve Bank ofNew Zealand warned in September that rates may rise in case global financial markets will not improve. Bank funding costs will rise and consequently, interest rates will also rise. HoweverNew Zealand banks currently do not need to access global markets and are well funded. Manufacturing Sales: Wednesday, 21:45. Rising commodity prices boosted manufacturing sales values by 2.1% in the June quarter following 2.7% gain in the previous quarter. REINZ HPI: Fri. Tue.New Zealand house prices dropped in October by 0.3% after 1.7% increase in the previous month. Nevertheless the housing market has stabilized after a slowdown in 2010 amid weak domestic consumption and uncertain economic outlook. * All times are GMT. NZD/USD Technical Analysis The New Zealand dollar started the week with a gap higher and moved swiftly higher, especially after crossing the 0.7732 line (mentioned last week). The 0.7825 line capped the pair in a distinct manner. Technical lines, from top to bottom: 0.8165 provided support for the pair at several occasions, and is our top point for now. 81.10 switched positions from support in August to resistance later on and is a minor line. 0.8060 was resistance in October and support beforehand. The round number of 0.80 managed to cap the pair in November and remains of high importance. Another round number, 0.79, is minor support. 0.7825 is of historic importance, as it capped the pair three times, in January and in September, and provided support in April. It is a very strong cap now. 0.7732 proved to be a significant line – very distinct in separating ranges. 0.7637 was a swing low in September and now switches to resistance. 0.7550 now has a stronger role after stopping the fall o fthe kiwi. It had a similar role back in January. 0.7470 was the trough in October and was very strong support before 0.7550 was broken. It now switches to resistance. The fresh low of 0.7370 is a fresh minor line of support. Further below, we reach lines last seen at the beginning of the year: 0.7340 worked as support at the end of 2010 and at the beginning of 2011. It had a similar role in March. 0.7250 is another minor cushion on the way down. I remain bearish on NZD/USD The hopes from Europe may continue at the beginning of the week, but the coordinated central bank action and the move by China to lower the RRR, show that the situation is worsening. The kiwi is a risk currency and can reverse the recent gains quite quickly. Further reading: For a broad view of all the week’s major events worldwide, read the USD outlook. For EUR/USD, check out the Euro to Dollar forecast. For the Japanese yen, read the USD/JPY forecast. For GBP/USD (cable), look into the British Pound forecast. For the Australian dollar (Aussie), check out the AUD to USD forecast. For USD/CAD (loonie), check out the Canadian dollar For the Swiss Franc, see the USD/CHF forecast. Anat Dror Anat Dror Anat Dror â€“ Senior Writer I conceptualize, design and create multi-lingual websites. Apart from the technical work, my projects usually consist of writing content for these sites in English, French and Hebrew. In the past, I have built, managed and marketed an e-learning center for language studies, including moderating a live community of students. Iâ€™ve also worked as a community organizer Anat's Google Profile View All Post By Anat Dror Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. MinorsNZD/USD Forecast share Read Next European Sentix Investor Confidence Falls Yohay Elam 10 years The kiwi enjoyed the fresh hopes in Europe and recovered some of its losses. It remains capped by resistance. Will it continue higher or fall from here? The rate decision is the major event this week. Here's an outlook for the events in New Zealand, and an updated technical analysis for NZD/USD Last week revealed encouraging figures such as the NBNZ Business Confidence rising to 18.3 from13.2 in October and Building Consents climbing 11.2% after 17.2% decline in September. Will this trend continue? Updates: NZD/USD started the week around the same levels. 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