NZD/USD: RBNZ looms as bears look beyond critical structural support towards 0.66 hanle

NZD/USD starts out the week on the defensive as the dollar retains a bid, dropping 20 pips to match last week's swing low at 0.6729.
Eyes turn to the RBNZ Monetary Policy Statement that is this week’s headline act.

Ross J Burland FXStreet

NZD/USD was flat on Friday, ending around 0.6740 as markets moved into consolidation of the dollar's advance across the board while the Kiwi was left licking its wounds following the soft NZ labour market data. Meanwhile, the RBNZ will be the main focus this week and a dovish outcome would likely spark a fresh wave of selling and an attack of the late Jan fractal low that guards the territory down to the start of the year's flash crash lows at 0.6581.

RBNZ in focus

"Since November, the labour market has flat-lined and the growth outlook has a duller pitch, though domestic inflation has been a little stronger. Global data has struck a softer note and risks have increased sharply, with central banks turning more dovish in concert. We expect the RBNZ will join the chorus this week, employing a similarly dovish tone that echoes the tenor of other central banks and market pricing, which has moved to price in a good chance of a rate cut, reflecting the changing balance of risks. That said, a dovish stance so soon from the RBNZ is not a necessary ingredient of our November cut call. The data and market pricing may well strike higher and lower notes, but we think the case for more monetary stimulus will become evident in time," analysts at ANZ Bank.

NZD/USD levels

Technically, the price is moving in on the 100-D SMA that guards the 21-Jan swing low just above 0.67 the figure. The indicators are negative, pointing to further downside with breakout potential below the aforementioned support structure with eyes on this year's flash crash lows at 0.6581. To the upside, the 23.6% fibo retracement at 0.6770 with a confluence of the round 0.6780 and the 4hr 200 SMA at 0.6771 is the initial target area ahead of the 6th Feb highs at 0.6832.

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.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs just above the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.