NZD/USD Threatens Topside Hurdle Ahead of RBNZ Meeting

Reserve Bank of New Zealand (RBNZ) to Keep Official Cash Rate during 1.75%.

Will Governor Wheeler Retain a Status Quo Ahead of His Departure?

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Trading a News: Reserve Bank of New Zealand (RBNZ) Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) is widely approaching to keep a executive money rate during a record-low of 1.75%, yet a uninformed remarks from Governor Graeme Wheeler and Co. might moderate a interest of a internal banking should a executive bank keep a doorway open to serve support a genuine economy.

What’s Expected:

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Why Is This Event Important:It seems as yet a RBNZ will hang with a standing quo as Governor Wheeler is scheduled to leave a helm in September, yet a executive bank appears to be in no rush to pierce divided from a easing-cycle as ‘numerous uncertainties remain, quite in honour of a general outlook, and process might need to adjust accordingly.’ In turn, a New Zealand dollar might come underneath vigour should a RBNZ adopt a some-more dovish opinion for financial policy, yet some-more of a same tongue might fuel a near-term liberation in NZD/USD as Fed officials continue to foresee a depot fed supports rate tighten to 3.00%.

Expectations: Bearish Argument/Scenario

Waning certainty accompanied by a slack in private-sector expenditure might pull a RBNZ to sound some-more cautions this time around, and a New Zealand dollar stands during risk of confronting near-term headwinds should a executive bank uncover a incomparable eagerness to serve revoke a executive money rate.

Risk: Bullish Argument/Scenario

Nevertheless, a pickup in business outputs interconnected with signs of a stabilizing housing marketplace might inspire Governor Wheeler and Co. to prominence an softened opinion for a region, and a kiwi-dollar might extend a allege from progressing this month should a RBNZ tame expectations for additional financial support.

How To Trade This Event Risk(Video)

Bearish NZD Trade: RBNZ Keeps Door Open For Another Rate-Cut

  • Need a red, five-minute candle following a rate preference to cruise a brief NZD/USD position.
  • If marketplace greeting favors a bearish kiwi trade, sell NZD/USD with dual apart position.
  • Set stop during a near-by pitch high/reasonable stretch from cost; during slightest 1:1 risk-to-reward.
  • Move stop to entrance on remaining position once initial aim is met, set reasonable limit.

Bullish NZD Trade: Governor Wheeler Drops Dovish Tone

  • Need a green, five-minute candle to preference a prolonged NZD/USD trade.
  • Implement same plan as a bearish New Zealand dollar trade, only in a conflicting direction.

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Potential Price Targets For The Release

NZD/USD Daily

NZD/USD Daily Chart

Chart – Created Using Trading View

  • Even yet a broader opinion for NZD/USD stays slanted to a downside, a unsuccessful run during a Dec low (0.6862) might encourage a incomparable liberation generally as a Relative Strength Index (RSI) clears a bearish arrangement carried over from a prior month; a tighten above a near-term jump around 0.7040 (50% retracement) to 0.7060 (38.2% retracement) opens adult a subsequent topside aim around 0.7100 (38.2% expansion) to 0.7120 (50% retracement).
  • Interim Resistance: 0.7520 (50% retracement) to 0.7530 (78.6% retracement)
  • Interim Support: 0.6885 (2017 low) to 0.6950 (38.2% retracement)

Impact that a RBNZ rate preference has had on NZD/USD during a final meeting

February 2017 Reserve Bank of New Zealand (RBNZ) Interest Rate Decision

NZD/USD 5-Minute

NZD/USD Chart

Chart – Created Using Trading View

The Reserve Bank of New Zealand (RBNZ) kept a executive money rate during a record-low of 1.75% during a initial process assembly for 2017, and it seems as yet a executive bank is in no rush to pierce divided from a easing-cycle as Governor Graeme Wheeler and Co. note ‘monetary process will sojourn accommodative for a substantial period.’ Moreover, a RBNZ struck a identical tinge to a vital counterparts and argued ‘global title acceleration has increased, partly due to rising commodity prices,’ and a executive bank might keep a doorway open to serve support a genuine economy as ‘numerous uncertainties remain, quite in honour of a general outlook, and process might need to adjust accordingly.’ The New Zealand struggled to reason a belligerent following a process meeting, with NZD/USD slipping next a 0.7250 segment to finish a day during 0.7187.

Read More:

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— Written by David Song, Currency Analyst

To hit David, e-mail dsong@dailyfx.com. Follow me on Twitter during @DavidJSong.

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