• NZD/USD firmed on Tuesday as New Zealand dollar attracted bids after the RBNZ reiterated concerns that inflation could prove more persistent than previously anticipated.
• RBNZ Chief Economist Paul Conway warned that higher global oil prices could lift inflation expectations, increasing the likelihood that underlying price pressures remain elevated.
• Paul Conway comments reinforced expectations that New Zealand's central bank may maintain a tighter policy stance for longer than expected.
• The central bank's Monetary Policy Committee last week raised its official cash rate by 25 basis points to 2.5%, the first hike in three years, as it sought to reduce policy stimulus in the face of rising inflation..
• On the data front, New Zealand's business confidence rose in the second quarter as fuel prices fell and the fuel crisis eased, a private think tank said on Tuesday.
• A net 8% of New Zealand firms expect business conditions to improve, up from a net 4% pessimism in the previous quarter, according to the NZIER's Quarterly Survey of Business Opinion (QSBO).
• Immediate resistance is located at 0.5813(Higher BB), any close above will push the pair towards 0.5840(50%fib).
• Support is seen at 0.5764(38.2%fib) and break below could take the pair towards 0.5713(SMA20).
Recommendation: Good to sell around 0.5850 with stop loss of 0.5900 and target price of 0.5800
