- NZD/USD hits 3-day high of 0.7298 in Asia, extending Friday’s rally from the low of 0.7194.
- USD offered across the board following the release of a disappointing housing data and Michigan confidence number on Friday.
- Rising expectations that the Fed will scale back its interest rate projections on the back of disappointing data weighing on the Greenback.
- The pair has edged lower from session highs and is hovering around channel top at 0.7275, only decisive break above could see further gains.
- Break above 0.7275 targets 0.7342 (78.6% Fib) and then 0.7375 (Feb 7 high).
- Bearish Stochastics divergence and fading momentum on MACD suggest exhaustion at highs.
- The focus this week is on the RBNZ rate decision and GDT auction.
- The central bank is widely expected to stay pat and repeat “monetary policy will remain accommodative for a considerable period”.
Support levels - 0.7246 (5-DMA), 0.7230 (61.8% Fib of 0.7485 to 0.6817 fall), 0.72
Resistance levels - 0.73, 0.7319 (June 14 high), 0.7342 (78.6% Fib)
Recommendation: We expect some consolidation at highs. Prefer to wait for clear directional bias.
