NZD/USD: mixed price action around on hold RBNZ jawboning the bird

Ross J Burland FXStreet

Currently, NZD/USD is trading at 0.7068, up 0.37% on the day, having posted a daily high at 0.7075 and low at 0.7016.

Statement by RBNZ's Wheeler following the OCR decision

NZD/USD moved back to pre-announcement levels after an initial offer in the Bird considering the language around the bird in the statement that accompanied the decision to keep rates on hold at 1.75%. The RBNZ said that further depreciation of the exchange is needed to achieve more balanced growth.Their policy will remain accommodative for a considerable period while the global monetary policy is expected to remain stimulatory but less so going forward. Their long-term inflation expectations remain around 2% while domestic growth outlook remains positive.

Elsewhere from the US session, there was uncertainty regarding the US healthcare bill, although the White House Press Secretary Sean Spicer announced that Trump believes health care bill will pass House of Representatives on Thursday, adding, "There are no plans to pull health care bill or delay the planned vote on Thursday."

Nevertheless, interest rates in the US 10-yr treasury yields dropped even lower from 2.42% to 2.37% to a fresh a three-week low. 2yr yields also fell from 1.26% to 1.24%. This pressured the greenback while it continued to struggle below the psychological 100 mark and ended in the index 0.2% lower, supporting the bird until 0.7071 highs ahead of the RBNZ where traders took profits ahead of the event.

NZD/USD levels

0.7098 remains the upside target guarding a break of the 0.71 handle, towards the double-bottom of potential resistance at 0.7130 on the 4hr chart in mid-Feb and late Fed business. 0.7245 comes as the late Jan/early Feb support and double top resistance Feb 16th and 23rd. To the downside, 0.7010/20 and 0.6950/60 levels are the key supporting areas guarding 0.6880 and March lows.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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