NZD/USD ahead of RBNZ
NZD/USD formed a hammer-like candle yesterday and recovered from $0.7760 (200-week MA) to $0.7790 today. The pair is trying to hold above $0.7965 (bottom of the weekly Cloud). Note that kiwi has already reached downside targets set after it in May breached the bullish channel.
Resistance lies at $0.8060 (50% Fibo of the advance from 2012 to 2013), $0.8110 and $0.8200. Support is at $0.7920 (61.8% Fibo).
The Reserve Bank of New Zealand will release its interest rate decision at 21:00 GMT. New Zealand’s finance minister English said today that NZD declines would be “very helpful”. The RBNZ Governor Wheeler also said that NZD drop is positive for the economy. On the one hand, the nation’s monetary authorities clearly want weaker kiwi. On the other hand, there are concerns that the rising housing prices start fuelling inflation that may be the reason for the RBNZ to sound more hawkish.
Last month, Wheeler said the central bank has been intervening in foreign exchange markets to try and smooth the tops of its peaks, and will continue to do so as long as it works. At the time, he said the local currency was about 18% above its 15-year average.
Chart. Daily NZD/USD