FxWirePro: NZD/USD spikes past 55-EMA, hits 5-week high post hawkish RBNZ decision

Chart - Courtesy Trading View 

NZD/USD spikes over 0.70% on the day to hit 5-week high above 200-week MA.

The pair was trading 0.72% higher on the day at 0.6779 at around 08:00 GMT, outlook is bullish.

Price action has broken above 55-EMA resistance and is on track to test daily cloud.

RBNZ lifts interest rate by 25 bps, its third consecutive rate hike on early Wednesday as widely expected.

The central bank also signalled a more aggressive tightening path going forward. It projected that the cash rate would reach 2.2% by the end of 2022 and 3.35% in the last quarter of 2023, 0.75% higher than its November forecast of 2.6%.

Decreasing odds of a diplomatic solution to the Russia-Ukraine tussles offered the latest blow to the market’s risk appetite.

US ruled out the scope of a summit between US President Joe Biden and his Russian counterpart Vladimir Putin.

That said, the fact that new economic sanctions on Russia were not as bad as feared helped ease some nervousness.

Technical indicators for the pair are strongly bullish. Retrace above 200-week MA raises scope for further gains. Next immediate bull target lies at 110-EMA at 0.6823.