NZD/USD grinds near 0.6250 with eyes on RBNZ, Fed Minutes

NZD/USD struggles to extend the corrective bounce off six-week low.
Sluggish sentiment, mixed headlines and US holiday challenge Kiwi pair buyers.
RBNZ Shadow Board expects 0.50% rate hike but NZ FinMin cites inflation as the key catalysts.
Fed hawks need confirmation from FOMC Minutes, second-tier data.

Anil Panchal FXStreet

NZD/USD seesaws around 0.6240 as it struggles to push back the bearish bias after a four-day losing streak, keeping the bounce off a six-week low during early Monday morning in Europe. In doing so, the Kiwi pair portrays the traders’ cautious mood ahead of the key Reserve Bank of New Zealand (RBNZ) monetary policy meeting and the Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting.

Earlier in Asia, the RBNZ's Shadow Board recommended 50 basis points (bps) of an increase in the benchmark cash rate by citing strong inflationary pressures. On the same line could be the latest comments from New Zealand (NZ) Deputy Prime Minister and Finance Minister (FinMin) Grant Robertson who said that the RBNZ has a responsibility to address inflation while also adding, “RBNZ needs to look through current events.”

It’s worth noting that the flood in New Zealand joins recent downside economic indicators for the Pacific nation to probe the RBNZ hawks.

Also challenging the NZD/USD bulls are the geopolitical fears emanating from the US-China tussles, recently about the Taiwan trade deal with Washington and Beijing’s ties with Russia.

On a different page, upbeat US data and mixed comments from the Federal Reserve (Fed) officials seemed to have triggered the NZD/USD pair’s corrective bounce off the multi-day low. Also allowing the Kiwi pair traders to push back the bears is the US holiday.

Looking forward, natural calamities and the recent weakness in Auckland’s data may probe the RBNZ hawks. However, this week’s 0.50% rate hike is almost given and may not impress the NZD/USD bulls unless offering hints for further strong rate increases.

Following the RBNZ meeting, the Fed Minutes will also be crucial for clear directions as the US central bank officials have recently praised the upbeat data surrounding inflation, Retail Sales and jobs.

Technical analysis

Sustained downside break of the 200-day Exponential Moving Average (EMA), around 0.6275 by the press time, keeps NZD/USD bears hopeful of breaking the three-month-old support line, close to 0.6220 at the latest.

Additional important levels

Overview
Today last price	0.6244
Today Daily Change	-0.0001
Today Daily Change %	-0.02%
Today daily open	0.6245

Trends
Daily SMA20	0.6387
Daily SMA50	0.6367
Daily SMA100	0.616
Daily SMA200	0.6187

Levels
Previous Daily High	0.6269
Previous Daily Low	0.6193
Previous Weekly High	0.6391
Previous Weekly Low	0.6193
Previous Monthly High	0.6531
Previous Monthly Low	0.619
Daily Fibonacci 38.2%	0.6222
Daily Fibonacci 61.8%	0.624
Daily Pivot Point S1	0.6202
Daily Pivot Point S2	0.616
Daily Pivot Point S3	0.6127
Daily Pivot Point R1	0.6278
Daily Pivot Point R2	0.6311
Daily Pivot Point R3	0.6354

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold extends range play around $4,150, with eyes on FOMC Minutes

Gold edges lower in the Asian session on Wednesday, stalling the previous day's goodish bounce from the $4,100 neighborhood, or a two-month low. The safe-haven US Dollar attracts some dip-buyers following this week’s pullback from the YTD high amid geopolitical uncertainties. This, along with a fresh leg up in US bond yields, caps non-yielding bullion, which remains confined within a one-week-old range ahead of FOMC Minutes.

ZEC expands institutional momentum as Winklevoss files for Zcash ETF

Winklevoss Asset Services, co-owned by crypto exchange Gemini founders Cameron and Tyler Winklevoss, filed a Form S-1 registration statement with the US Securities and Exchange Commission (SEC) on Tuesday for the Winklevoss Zcash (ZEC) ETF. The filing proposes a fund that would hold ZEC and seek to track its price.

RBI looks set to step up Repo Rate by 25 bps to 5.5%

The Reserve Bank of India is set to announce its bi-monthly monetary policy decision on Wednesday at 10:00 AM IST, in a meeting where the central bank is expected to initiate an interest rate hike cycle after maintaining a status-quo so far this calendar year. According to the market consensus, the RBI will hike its key Repo Rate by 25 basis points to 5.5% from 5.25%.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.