A more hawkish than expected RBNZ has sent the kiwi soaring
NZD/USD is up 1% on the day, holding above 0.7000 now as buyers are looking to try and press forward with further gains after the RBNZ policy meeting decision earlier.
In case you missed it:
- RBNZ policy announcement - says level of stimulus to be reduced
- RBNZ: 'Least regrets' decision is reducing some support sooner
- New Zealand bank ASB now forecasting an August RBNZ cash rate hike
- ANZ shift its forecast for the RBNZ to an August rate hike
As seen above, the reaction to that is for bringing forward rate hike calls and that itself will likely build further momentum in the weeks ahead.
Going back to the NZD/USD pair, price is now pushing past minor resistance above 0.7009 and should buyers keep above that, there is a good incentive for further gains back towards the 200-day moving average (blue line) @ 0.7067 next.
The daily resistance from the 61.8 retracement level @ 0.7073 and then swing region resistance @ 0.7095-05 will pose a greater test though moving forward. That said, there is a decent technical picture forming with a double-bottom seen @ 0.6923.
Fed chair Powell's speech will offer another risk factor to consider in the day ahead so the kiwi is likely to find it easier to gather further comfort against the likes of the aussie, yen, and franc - considering the divergence in policy.
Looking ahead today, will the BOC take a page out of the RBNZ's book?
