NZD/USD consolidates RBNZ-led spike around mid-0.72s

Having peaked near 0.7280 region in early Asia on the RBNZ policy decision, the NZD/USD pair drifted lower, now entering a phase of consolidation around mid-0.72s as the dust settles over the central banking event.

NZD/USD awaits fresh fundamental drivers

The spot caught a fresh bid on the RBNZ announcement and rallied 70-pips, as New Zealand’s central bank maintained upbeat view on the economy, despite latest dismal GDP numbers. Meanwhile, the RBNZ kept rates on hold at a record low of 1.75% and maintained a clear neutral bias at its policy meeting held earlier on the day.

However, the bulls lacked follow-through and erased almost half the RBNZ-led upwards spike, as markets digest the RBNZ’s take on the housing markets and inflation outlook. Moreover, stalled USD selling across the board also capped the upside in the spot.

Focus now shifts towards the US jobless claims and CB leading index for fresh impetus on the buck, while speech by the FOMC member Powell due later in the NA session will also draw some attention.

NZD/USD Levels to consider                                                                              

Ross J Burland, Analyst at FXStreet explained: “NZD/USD managed a score through the 0.7250 mark on the data to aforementioned highs but again fell shy of the key level of 0.7280 upside target. To the downside, 0.7200 guards 0.7145 and a break back below 0.7080/90 are key near-term downside areas. On the wide, the 0.7375 YTD highs are a key target to the upside and to the downside, a break below 0.7080/00 opens 0.6970.”