• NZD/USD slipped lower on Monday as escalating U.S.-Iran tensions weighed on risk sentiment and supported the U.S. dollar.
• Geopolitical risks intensified after Iran warned of retaliation to Donald Trump’s threat to “obliterate” its electricity grid, while the U.S. moved to deploy Marine expeditionary forces to the Middle East.
• The inflationary pulse from energy has seen markets abandon hopes for further monetary easing globally and swing to pricing in rate hikes across most developed nations.
• All eyes are on Anna Breman’s speech Tuesday, as markets have sharply repriced for nearly 90 bps of tightening this year, despite the RBNZ signaling just last month that even a single rate hike was not fully assured.
• Anna Breman is expected to address the war’s impact on New Zealand’s economy, which is still struggling to emerge from a downturn.
•Fitch Ratings revised New Zealand’s outlook to negative while affirming its AA+ sovereign rating. This signals growing concern about the country’s fiscal trajectory and economic outlook
• Immediate resistance is located at 0.5832(50%fib), any close above will push the pair towards 0.5899(SMA 20).
•Support is seen at 0.5771(Lower BB) and break below could take the pair towards 0.5734(38.2%fib).
Recommendation: Good to sell around 0.5830 with stop loss of 0.5880 and target price of 0.5760
