Can the RBNZ push the NZD/USD close to 0.6500?
|- The RBNZ's impending rate hike may work in the favour of the Kiwi dollar and may reignite its previous week's bullishness.
- However, the Kiwi dollar might be staying relatively neutral in respect to local fundamental data.
The NZD/USD has been on a bullish trend against the US dollar since August 14, 2022. Unfortunately, the pair could not reach the 0.6500 key area, before staging a two-day reversal starting on August 15. Last week's high topped out at around 0.6470.
The drop in US Treasury yields was one factor that caused this uptrend in the NZD/USD, as investors worried about the US Federal Reserve tempering its aggressiveness as CPI data showed signs of inflation easing up.
With the upcoming RBNZ monetary policy statement this Wednesday 17 August, markets expect a 50- basis points rate hike, increasing the NZ cash rate to 3.00%. This rate hike may work in the favour of the Kiwi dollar and may reignite its previous week's bullishness. This may be a contributing factor to the NZD/USD trying again to penetrate the 0.6500 price level.
However, the Kiwi dollar might be staying relatively neutral in respect to local fundamental data. The currency might be more so relying on external factors, especially the state of China's economy, and global commodity prices.
NZD/USD 1D, with the Fibonacci Extension/ Retracement/ Pivot Points Indicator
On the technical side, the NZD/USD outlook is indecisive from the perspective of the daily chart. We might have to wait for the RBNZ decision to be released before a clear path emerges for the pair.
The pair currently hovers above the 38.2% level of the Fibonacci Retracement Pivot Points on the daily chart and has seemingly found support at 0.6330. The NZD/USD price could potentially bounce at this pivot point and move to at least the 61.8% fib level or 0.6390.
Further afield, a break above the 78.6% fib level or the 0.6450 resistance level, the pair may continue the bullish move toward the 100% Fibonacci level, which is the 0.65 key target area for the NZD.
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