- Kiwi subdued on the day ahead of GDT dairy auction and RBNZ (due Wednesday).
- Technical studies support upside, but the pair is struggling to extend gains above 20-DMA at 0.7045.
- Break above 20-DMA could see test of 100-DMA at 0.7111.
- But on the flipside, close below 5-DMA could drag the pair to test 0.6916 (50% Fib of 0.6347 to 0.7485 rally).
- Data released earlier today showed NZ visitor arrivals m/m at 1.9%, while net migration arrived 6000 vs the previous 6,500.
- Focus on GDT dairy auction later today, which is priced by futures to show a WMP price fall of 5%, potentially weighing heavily on the bird.
- Expectations are for the RBNZ to stay pat, but there’s a risk of a slight dovish shift in tone due to weaker dairy prices, subdued housing, and slower economic growth.
- NZIER shadow board stated that the RBNZ should maintain interest rates at 1.75% with a tightening bias.
Support levels - 0.7028 (5-DMA), 0.6975 (Mar 17 low), 0.6916 (50% Fib of 0.6347 to 0.7485 rally).
Resistance levels - 0.7045 (20-DMA), 0.7075 (38.2% Fib retrace of 0.7375 to 0.6890 fall), 0.7110 (100-DMA).
TIME TREND INDEX OB/OS INDEX
1H Neutral Neutral
4H Neutral Neutral
1D Bullish Neutral
1W Neutral Neutral
Recommendation: Good to go long on breakout above 20-DMA at 0.7045, SL: 0.70, TP: 0.7080/ 0.71/ 0.7150
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at 97.4315(Bullish), while Hourly USD Spot Index was at -87.3146(Bearish) at 0440 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
