Breaking: NZD/USD jumps over 40 pips on RBNZ rate hike expectations
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ASB Bank now sees the RBNZ raising the cash rate in Nov 2021 and says today's business survey shows the RBNZ can't afford to wait.
As a result, the bird has rallied over 40 pips to 0.7065:
Additionally, this has given the crosses a boost and has sent NZD/JPY well on its way to the projected 1:3 risk to reward opportunity target, as per the following prior analysis: NZD/JPY Price Analysis: Bulls stepping in at a critical confluence of support.
Prior analysis, 4 hour chart
''There is a high probability that the price will move higher from here.
A long position can be entered for a 1:3 risk to reward opportunity with a stop loss protecting the position from below the subsequent support structure...''
Live market, 4-hour chart
As illustrated, the price has indeed moved higher and is testing the resistance structure.
If the price fails to break here on first attempts, a healthy correction back to retest the new support structure would be expected to result in a continuation to the upside.
NZ NZIER QSBO: Tighter and tighter (ANZ Bank)
The Business Sentiment increased (sa) in the June quarter, and is well-above pre-COVID levels (and the historical average).
As analysts at ANZ Bank pointed out, ''more importantly for economic activity over the next few quarters, firms’ reported and expected trading activity rose strongly, investment intentions continued to increase, and employment intentions were up too.''
''Of particular note for the RBNZ is the sharp surge in gauges of capacity pressure.''
''Pricing intentions were up versus Q1, consistent with our ANZ Business Outlook. The CUBO measure rose, and the labour market is tightening, with difficulty finding labour well-up, and a larger share of firms reporting that labour shortages are the main constraint holding them back.''
''All up, these results reinforce our expectation that rate hikes are on the horizon – we’ve pencilled in February 2022, but risks are pointing towards sooner rather than later. The economy is booming, and while there’s still some softness in the tourism industry due to the border closure, the sheer strength in demand elsewhere is swamping this effect.''
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