NZD/USD: traders position ahead of tomorrow's RBNZ
- NZD/USD a poor performer on the overnight sessions.
- ANZ Business Outlook survey will be watched closely.
- A steady hand from the RBNZ will be expected.
NZD/USD is currently trading at 0.6854 having made a high of 0.6902 and a low of 0.6846 in NY as the weakest in the G10 space ahead of the RBNZ decision this week.
Despite a modest bounce in risk sediment, the bird was a poor performer, approaching levels where it has previously found decent support. The greenback was the main culprit in the decline where the DXY was trading at the higher end of the 94.1710-94.7720 for the best part f the NY session as traders position for tomorrow's RBNZ decision.
RBNZ expectations
A steady hand from the bank will be expected and rates to be left at 1.75% is assured. However, there will be keen interest in the language of the statement since the markets have seen a soft NZ Q1 GDP but expansive fiscal policy.
The day ahead
For the day ahead, the ANZ Business Outlook survey will be watched closely as will the May trade data, with a small (NZD100mn) surplus expected for the month but the annual deficit around –NZD3.7bn.
NZD/USD levels
NZD/USD Technical Analysis: flirting with an important horizontal support
Support is located at 0.6820 while resistance is located at 0.6980. 0.6780 comes as next downside target meeting the lows of mid-Nov 2017. On the upside, albeit not favoured, above 0.6980 lies the 50-D SMA at 0.7002 and then 0.7060 guarding space en route to 0.7440 as the January tops on the wide.