NZD/USD trades at the daily opening level near 0.6740 ahead of RBNZ
|- US Dollar Index erases daily gains, returns below 95.20.
- The RBNZ is expected jeep the policy rate unchanged at 1.75%.
Earlier today, the NZD/USD pair gained traction during the Asian trading hours after the RBNZ announced that it revised its 2-year inflation expectation to 2.04% from 2.01% previously. Furthermore, New Zealand's Finance Minister, Grant Robertson, stated that there was "every reason to be optimistic" regarding the economic outlook. However, the pair struggled to push higher in the second half of the day and was last seen trading at 0.6740, where it was virtually unchanged on a daily basis.
A stronger greenback in the early NA session forced the pair to erase its gains. Following Richmond Fed President Barkin's hawkish comments, the US Dollar Index advanced to a daily high at 95.42. Barkins argued that the Fed needed to continue to raise interest rates amid tight labor market conditions and steady inflation growth. Nevertheless, the index went into a consolidation phase amid a lack of fresh fundamental drivers and was last seen flat on the day at 95.18.
During the early trading hours of the Asian session on Thursday, the RBNZ is going to publish its monetary policy statement and announce the interest rate decision, which is expected to stay unchanged at 1.75%.
“Once the OCR is left at 1.75% as widely expected, all eyes on the RBNZ's projected OCR path in the Monetary Policy Statement. Some look for a delay in the 10bp increase from Q3 2019 into 2020, but we don't think such a signal is necessary, and look for no change in guidance. Orr so far is a communication wildcard, making the press conference mandatory viewing for NZD investors,” TD Securities analysts noted in a recently published report.
Technical outlook
On the upside, resistances align at 0.6755/60 (Jul. 6 high/daily high), 0.6820 (50-DMA) and 0.6860 (Jul. 9 high). Supports are located at 0.6685 (Jul. 3/Jul. 2 low), 0.6575 (Mar. 16, 2016, low) and 0.6500 (psychological level).
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