NZD/USD clocked to a three-day high of 0.7283 in Asia, extending Friday’s rally from the low of 0.7194. The American dollar was offered on Friday in the North American session following the release of a disappointing housing data and Michigan confidence number.
Kiwi is up 6.8%
The NZD/USD gained 6.8% over the last 5 weeks. The spot bottomed out at 0.6817 on May 11 and rose to a high of 0.7319 last Wednesday. Broad based USD selling on expectations that the Fed will scale back its interest rate projections helped NZD/USD score impressive gains. However, the Fed delivered a hawkish rate hike, thus stopping the rally at a high of 0.7319.
Interestingly, the NZ-US 10- year bond yield spread has remained largely stagnant around 66 basis points during the 5-week period. The 2-year yield spread narrowed from 76 basis points (on May 11) to 0.66 basis points (as of today).
The focus this week is on the RBNZ rate decision and GDT auction. The central bank is widely expected to repeat the language of the May statement - “monetary policy will remain accommodative for a considerable period”.
NZD/USD Technical Levels
The daily MACD shows loss of bullish momentum. A bearish MACD divergence could be on the cards, although Friday’s bullish inside day candle and a strong follow through today is encouraging for the bulls.
A break above 0.7319 (last week’s high) would open up upside towards 0.7376 (Feb 4 high) and 0.7445 (weekly 200-MA). On the downside, breach of immediate support of 0.7247 (session low) could yield a sell-off to 0.7223 (10-DMA) and 0.7190 (weekly 5-MA).
|TREND INDEX||OB/OS INDEX||VOLATILY INDEX|
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 securities. 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 Forex 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.