The RBNZ omitted the comment that the central bank expected further policy tightening to contain inflation. They also reiterated that the currency remains “unjustified and unsustainable” and they expect a further “significant depreciation”.
The disappointment was that in August the RBNZ sold NZ521 million in helping to depreciate their dollar. In the current month, the amount announced was only NZ30 million. That, has helped rally the NZD in trading today. That could change of course. So be aware.
The charts below show the movements of four of the major pairs.
The major NZD pairs are showing different looks.
NZDJPY
The NZDJPY has recovered all of the losses post-FOMC. The pair initially found sellers against the 100 hour MA (blue line) but after the break above, the buyers were there on the dips. The reiteration that the Japanese Pension Fund would invest 25% in stocks, sent the JPY pairs higher, and that included the NZDJPY. The BOJ is expected to keep bond buying unchanged when they announce their monetary policy statement later today. The NZDJPY is being pushed around by the JPY and the JPY has been weak in the NY session today.
AUDNZD
The AUDNZD has been able to keep above the 38.2-50% of the move up from yesteday’s pre-FOMC low. The NY session today has not seen an hourly close below the 38.2% retracement level at the 1.1245. Watch this level for close support. Stay above and the buyers remain in control. I like it.
NZDUSD
The NZDUSD had the double shot from from FOMC being more hawkish and the RBNZ being more “dovish”, but that has not stopped the pair from rallying back higher. The pair has moved above the broken trend line and above the 38.2% in the process. The price is back below the 38.2% at 0.78458. I am getting the feeling that the buying may be over and this may be turning the tide back lower for the pair. A move below the broken trend line at the 0.7822 will be eyed in the new trading day for confirmation that the corrective top is in place. What I don’t want to see a move above 0.7853 (high close is 0.78531 on the hourly).
GBPNZD
The GBPUSD fell below the 100 hour MA (blue line the chart) and the 50% of the move up at the 2.04184 level. A move above these levels will be needed to push the pair higher now. A move below the 200 hour MA at the 2.0370 will not help a bullish scenario for the pair.
