- NZD/USD fails to hold onto recovery gains ahead of key data.
- The US-China trade sentiment stays sluggish, a lack of data/events limits market momentum off-late.
- RBNZ data will be the key before tomorrow’s RBNZ decision.
Kiwi traders are waiting for the key to predict Wednesday’s RBNZ rate decision after witnessing a noticeable upside on Monday. In doing so, the NZD/USD pair stays below 50-day Exponential Moving Average (EMA) resistance while taking rounds to 0.6362 at the start of Tuesday’s Asian session.
In addition to better than forecast China Consumer Price inflation (CPI) numbers, published during the weekend, comments from the New Zealand Institute of Economic Research’s (NZIER) ‘shadow’ monetary policy board seem to have contributed to the kiwi’s latest strength.
It should also be noted that the Reserve Bank of New Zealand (RBNZ) officials have been praising their August rate cut while staying away from any signals to further such action in their recent appearance. The same could also be considered as additional support for the buyers’ optimism ahead of tomorrow’s rate decision.
Odds favoring a trade deal between the United States (US) and China have again taken a U-turn after the Trump administration refrained from clearly supporting the rollback of tariffs. However, the US holiday limited the news flow and hence markets remained mostly quiet on Monday.
Investors will now look forward to the fourth quarter (Q4) RBNZ Inflation Expectations (QoQ) number to better predict the RBNZ’s next move. Ahead of the event, the Australia and New Zealand Banking Group (ANZ) says, “Today’s RBNZ inflation expectations release at 3 pm is the last major piece of the data puzzle before the OCR decision is announced tomorrow, and it could have a meaningful impact on the decision. Inflation expectations moving away from target (in either direction) denies the RBNZ the luxury of “waiting and seeing” the impact of previous OCR moves. A further tick down today from 2% could spur on a sense of urgency among the Committee. A small tick up may provide some comfort, but perhaps not enough to offset a downgrade to the near-term growth outlook.”
Prices need to close beyond 50-day EMA level of 0.6372 in order to revisit 0.6400 round-figure and 100-day EMA level of 0.6431, failing to do so can keep the quote under pressure towards 0.6300 round-figure.
- R3 0.6428
- R2 0.6405
- R1 0.6367
- PP 0.6344
- S1 0.6306
- S2 0.6283
- S3 0.6245
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.