The Kiwi tossed and turned after the RBNZ announced its policy decision today.
Can NZD/USD sustain its climb?
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/JPY’s consolidation breakdown during the JPY rally. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. NFIB small business index improved from 89.4 to 91.0 in June vs. estimated 89.9 figure
New Zealand visitor arrivals slumped 27.5% month-over-month in May, following earlier 16.9% decline
Japanese core machinery orders tumbled 7.6% month-over-month in May vs. estimated 0.9% uptick and earlier 5.5% gain
Japan’s producer prices declined from 5.2% y/y to 4.1% in June, marking its sixth consecutive monthly decline
RBNZ kept OCR unchanged at 5.50% as expected, citing that “level of interest rates are constraining spending and inflation pressure as anticipated and required”
Price Action News
NZD Pairs 15-min Overlay
The Kiwi wobbled after the RBNZ made its monetary policy announcement, as the central bank decided to keep interest rates on hold at 5.50% as expected and signaled plans to keep it there for much longer.
The committee acknowledged that global growth remains weak and that inflationary pressures are subsiding, supporting their decision to keep the OCR at “a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1 to 3% annual target range, while supporting maximum sustainable employment.”
The New Zealand currency popped slightly higher after the dust settled, before eventually resuming its slump later in the Asian session.
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. headline and core CPI at 12:30 pm GMT
FOMC member Kashkari’s speech at 1:45 pm GMT
BOC monetary policy decision at 2:00 pm GMT
BOC press conference at 3:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/USD: 15-min
NZD/USD 15-min Forex Chart by TV
This pair has formed higher lows and higher highs over the past couple of days, cruising inside a freshly-formed ascending channel.
Price just retreated from the resistance and seems to be in correction mode once more, testing the mid-channel area of interest that lines up with the pivot point (.6200) at a major psychological mark.If Kiwi bulls charge again right here, NZD/USD could resume the climb to the channel top that coincides with R1 (.6230) or higher.
A larger pullback could still reach the channel bottom at .6180, which is just above S1 (.6170) and the previous day lows. A break below this support zone, on the other hand, could signal that a reversal is in the works.
The U.S. June CPI report is comin’ right up, so this release should provide additional volatility for this dollar pair. Downbeat inflation readings are expected, which means we might see another round of USD losses on dampened FOMC rate hike hopes.
Planning on trading this pair? Make sure you account for the average NZD/USD volatility of around 61.6 pips when setting entries and exits!