- NZD/USD has dropped to fresh lows of 0.6777 on the RBNZ holding rates and a dovish one-page statement.
- NZD/USD has not fallen away too far while the RBNZ maintains that the next move could be up or down.
NZD/USD has been on the back foot with a stronger greenback of late and yesterday's weak ANZ business confidence sent the bird lower below the 0.6880 key support that was broken at the start of this week.
- RBNZ leaves interest rate unchanged at 1.75%, direction of next move is equally balanced, up or down
With no accompanying forecasts or Monetary Policy Statement, much attention is being paid to the one-page statement that has been released alongside this decision where the RBNZ has remained a cautionary tone here while inflation shows little consistent signs of life - indeed, the bank has maintained that the next move in interest rates could be either up or down and that “interest rates will be at the exclusionary level for a considerable period of time".
"We are well positioned to manage change in either direction - up or down - as necessary."
The RBNZ explained in the accompanying one-page statement that CPI inflation is likely to increase due to rising fuel prices but consumer prices remain below the target. Inflation is predicted to gradually rise to the 2% target, however, the RBNZ said that there is more spare capacity in the economy than previously anticipated to due to weaker GDP.
Other key remarks from the one-page statement:
- Employment is around its sustainable level.
- consumer price inflation remains below the 2 percent mid-point of our target, necessitating continued supportive monetary policy for some time to come.
- Global economic growth is expected to support demand for our products and services.
NZD/USD Technical Analysis: Kiwi near 2018 lows post RBNZ
Support is located at 0.6740 while resistance is located at 0.6850. 0.6680 comes as next downside target meeting the lows 21st May 2016 weekly stick. On the upside, albeit not favoured, above 0.6850 and then the 50-D SMA at 0.6982 comes 0.7060 guarding space en route to 0.7440 as the January tops on the wide. However, while well below the key 200-month moving average support at 0.6980. Technicals stay bearish. RSIs are biased to the downside longer term, (daily RSI a touch above 30 and oversold territory).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD retreats toward 1.0750 as markets reassess Fed, ECB bets after a blow
EUR/USD remains sidelined near 1.0780-75 as it consolidates the biggest daily jump since March heading into Friday’s European session. The Euro pair portrays the market’s sluggish momentum amid a light calendar and positioning for the next week’s top-tier data/events.
GBP/USD grinds below 1.2600 within fortnight-old bullish channel
GBP/USD buyers take a breather at the highest level in one month, making rounds to 1.2550 during early Friday morning in Europe. In doing so, the Cable bulls pause after posting the biggest daily gain since early March the previous day.
Gold bulls need acceptance from $1,970, $1,990 and Fed
Gold remains sidelined as bulls take a breather after rising the most in five weeks the previous day, staying on the way to posting the second consecutive weekly gain. The XAU/USD is yet to cross the short-term key hurdles.
Binance.US to suspend USD deposits, citing aggressive and intimidating tactics by the SEC
BinanceUS, the American arm of Binance.com, has indicated plans to suspend USD deposits, noting that its banking partners would do the same for withdrawal beginning June 13. According to the notice, the move is attributed to aggressive and intimidating tactics employed by the United States Securities and Exchange Commission (SEC).
Jobless claims may offer well-timed comfort for the Federal Reserve
Jobless claims spiked last week in what could be the start of another trend higher after stabilizing over the last few months. Claims had been expected to rise much earlier than this but for one reason or another, they've stayed remarkably steady. It's also worth noting that this is only one release so unless it's backed up by more of the same, we can't read much into it.