NZD/USD remains volatile near 0.6900, all eyes on RBNZ
|- Risk-on remains present ahead of the RBNZ.
- Traders look for dovish signals from the New Zealand central bank to confirm November rate-cuts.
NZD/USD seesaws around 0.6900 round-figure at the start of Wednesday’s Asian trading. On Tuesday, the Kiwi pair remained on a back-foot as the US Dollar was in demand due to recovery in bond yields supporting risk-on sentiment. Investors now await monetary policy meeting result from the Reserve Bank of New Zealand (RBNZ) for fresh impulse.
Latest comments from the Fed policymakers managed to convince global investors to put aside their expectations of the US recession predicted last-week on yield differentials. 10-year US bond yields are now around 2.425 and recovered from their 3.777.
Traders now concentrate on RBNZ results in light of recent drawdown in headline economics, like GDP figures, coupled with challenges to the US-China trade deal’s impact on future monetary policy.
The market consensus signal no change in present monetary policy but details of the rate statement will be closely observed in order to receive signals supporting the much anticipated November rate cut.
Analysts at ANZ also expect no change in the official cash rate (OCR) but call for a November rate cut based on a steady accumulation of small disappointments considered domestic data and global risk.
NZD/USD Technical Analysis
The nine-month-old descending trend-line continues to act as a strong upside barrier for the NZD/USD pair around 0.6915 now, a break of which can propel the quote towards 0.6940 and 0.6970 ahead of flashing 0.7000 on the chart.
Meanwhile, an immediate ascending trend-line stretched since March 07 can support the quote near 0.6880 ahead of highlighting 0.6830 and 0.6800 supports.
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