- NZD/USD extends weakness ahead of RBNZ rate decision, bias remains lower as long as channel top resistance holds.
- After the recent GDP miss,markets are not expecting anything particularly hawkish from the RBNZ.
- OCR is likely to be left on hold at 1.75% while the central bank is expected to repeat May's neutral policy guidance.
- The pair is currently hovering around 5-DMA at 0.7231, close below will drag the pair lower.
- The pair has edged lower from channel top at 0.7275, only decisive break above could see further gains.
- Break above 0.7275 targets 0.7342 (78.6% Fib 0.7485 to 0.6817 fall) and then 0.7375 (Feb 7 high).
- Bearish Stochastics divergence and fading momentum on MACD suggest exhaustion at highs.
Support levels - 0.72 (23.6% Fib of 0.6817 to 0.7319 rally), 0.7185 (June 15 low), 0.7165 (20-DMA)
Resistance levels - 0.7231 (5-DMA), 0.73, 0.7319 (June 14 high)
Recommendation: Good to go short on close below 5-DMA, target 0.72/ 0.7185/ 0.7165.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -26.3715 (Neutral), while Hourly USD Spot Index was at 94.7585 (Bullish) at 0320 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
