NZD/USD – Bulls Gaining Initiative Ahead of RBNZ

NZD/USD – Bulls Gaining Initiative Ahead of RBNZ

Kiwi dollar was the highest since the Asian trading session, bouncing off the 0,845 support level and as since climbed above the 0.847 resistance and the closing level perhaps even more important last Friday - back in black for this week. What is impressive is that prices have managed to push higher despite a bearish Asian session which saw the Nikkei 225 falling 2.59% and the Hang Seng Index shed 1.65%. Therefore, it is clear that the sentiment of NZD / USD is bullish at the moment, which will provide a buffer against the "risk off" appetite in European session and US later.

Time Table

This strong bullish sentiment is not surprising with RBNZ rate decision within 12 hours. The central bank of New Zealand will raise rates tomorrow, so we would struggle to find willing sellers in the meantime. However, long-term bullish outlook for NZD / USD is questionable given that risk appetite is still largely bearish. Therefore, it is still possible that the bears can just go back tomorrow after the rate decision. In addition, it is clear that the market has already taken into account a rise in rates scenario already, increasing downside risks should fail to RBNZ rate hike as planned. Although RBNZ increased 25 basis points rate, the market may be abashed, further upward limit follow through or even start selling lower on behavior "buy the rumor sell the news".

Daily Graphic

Graph Daily tips as the downward pressure that we could have a high potential in our hands if 0850 resistance remains intact despite rising interest rates. stochastic indicator is in agreement with both readings in the overbought region, with a favored down cycle going forward. Nevertheless, a bullish scenario is also possible that the curve Stoch just recently pushed a down cycle signal, again suggesting that the bullish sentiment is strong. However, this could also be explained once more that the bears are not suicidal enough to sell to the decision RBNZ rate coming soon. As such, directional traders should wait for the decision of the RBNZ and the resulting reaction before committing full play, because it will be a better indication of where we are headed in the coming days or weeks compared to the current time.

Links:
GBP / USD - Supports on the support level at 1.66
AUD / USD - greatly reduced through the key 0.0 level
EUR / USD - Far slightly facilitates resistance level at 1.39

This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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