7 Mar 2016
NZD/USD due a correction? RBNZ coming up
NZD/USD has had a series of up days over the last week and recovered from the lows of 0.6347 on the 19th Jan in a choppy yet determined drift to the upside, meeting highs of 0.6818 in recent trade at the end of last week's session. However, is this a justified level, while this week comes with the RBNZ and there are downside risks in that event?
The RBNZ meeting is on Wednesday and the Central Bank has already communicated that it is preparing for a rate cut. While the bird is making a strong come back, this could be another factor that might force the hand of the RBNZ and opens risks to the downside, along with lower energy levels and the uncertainties that remain within the slowdown in global growth.
NZD/USD levels
Technically, NZD/USD penetrated the 0.68 handle lats week, but failed to close above it, leaving less conviction in the trade for the week ahead as momentum flattens in the 4hr charts with RSI above 70. The pivot is at 0.6781 and S2 is at 0.6675 as a key target to the downside initially, ahead of the daily 20 dma. Below there, the 50 dma is at 0.6615 below S3 at 0.6635. Should the bird break above 0.68 and close on a daily basis, the objectives are 0.6887 through the mid point with closes to open R3 at 0.6953.
The RBNZ meeting is on Wednesday and the Central Bank has already communicated that it is preparing for a rate cut. While the bird is making a strong come back, this could be another factor that might force the hand of the RBNZ and opens risks to the downside, along with lower energy levels and the uncertainties that remain within the slowdown in global growth.
NZD/USD levels
Technically, NZD/USD penetrated the 0.68 handle lats week, but failed to close above it, leaving less conviction in the trade for the week ahead as momentum flattens in the 4hr charts with RSI above 70. The pivot is at 0.6781 and S2 is at 0.6675 as a key target to the downside initially, ahead of the daily 20 dma. Below there, the 50 dma is at 0.6615 below S3 at 0.6635. Should the bird break above 0.68 and close on a daily basis, the objectives are 0.6887 through the mid point with closes to open R3 at 0.6953.