FxWirePro: NZD/USD breaks above 50% Fib at 0.6930, targets 0.6960
RBNZ kept rates on hold at a record low of 2.25%, as widely expected, and talked down the NZD levels, while adding that the policy is likely to remain accommodative. The bird defied a dovish RBNZ, caught a strong knee-je…
RBNZ kept rates on hold at a record low of 2.25%, as widely expected, and talked down the NZD levels, while adding that the policy is likely to remain accommodative.
The bird defied a dovish RBNZ, caught a strong knee-jerk bid and skyrocketed over 110 pips against the USD from the lows of 0.6823 to 0.6940.
Shorts were squeezed as markets were disappointed with no clear guidance from the central bank for a June rate cut.
Subsequently NZD/USD pared nearly half the RBNZ-led rally, but has resumed upside to trade around session highs at 0.6932.
0.6930 is 50% Fib retrace of 0.7053 to 0.6807 fall, a strong resistance level. Clear break above will see next hurdle at 0.6952 and the 0.6960 (61.8% Fib).
The pair has broken strong trendline resistance at 0.6980 and weakness only below trendline now turned support.
Markets will now assess today’s RBNZ policy statement ahead of the US advance GDP numbers due later in the NY session.
Recommendation: Good to long dips around 0.6930, SL: 0.69, TP: 0.6960/0.6980/0.70
