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13 Mar 2014
NZD/USD extends through onto 0.86 handle
FXStreet (Guatemala) - NZD/USD has continued on the bid and is testing the 0.86 handle after a relentless run up through key resistance levels through 0.8500 and Oct 2013 highs.
NZD/USD is fuelled by markets recognising that the RBNZ marked itself out as the first developed world central bank to hike interest rates this cycle. Jane Foley, Senior Currency Strategist at Rabobank, explained that the move by the RBNZ was very well anticipated, the tone of the accompanying hawkish statement also offered few surprises but the fact that Governor Wheeler indicated that rates could rise by around 2% over the next 2 years was a forceful piece of forward guidance which pushed NZD/USD back to its highest levels for a year. “In the accompanying policy statement, the RBNZ described the economic as having “considerable momentum”. It estimated GDP “to have grown by 3.3 percent in the year to March” and “warned that inflationary pressures are increasing and are expected to continue doing so over the next two years”. While Wheeler noted that there has been some moderation in house price inflation he also warned that the increase in net immigration inflow would “remain an offsetting influence”. The statement also reiterated warnings that the strength of the NZD is a “headwind to the tradables sector” and that the speed and extent to which the OCR will be raised will depend on economic data and the RBNZ’s “continuing assessment of emerging inflationary pressures””.
NZD/USD Levels
The 20 DMA is 0.8377, the 50 DMA is 0.8310 and the 200 DMA is 0.8154. RSI (14) reads 74.87. Supports are ascending from 0.8435, 0.8455, 0.8492, 0.8513. Spot is 0.8599 while resistances are 0.8586, 0.8643, 0.8676 and 0.8733.
NZD/USD is fuelled by markets recognising that the RBNZ marked itself out as the first developed world central bank to hike interest rates this cycle. Jane Foley, Senior Currency Strategist at Rabobank, explained that the move by the RBNZ was very well anticipated, the tone of the accompanying hawkish statement also offered few surprises but the fact that Governor Wheeler indicated that rates could rise by around 2% over the next 2 years was a forceful piece of forward guidance which pushed NZD/USD back to its highest levels for a year. “In the accompanying policy statement, the RBNZ described the economic as having “considerable momentum”. It estimated GDP “to have grown by 3.3 percent in the year to March” and “warned that inflationary pressures are increasing and are expected to continue doing so over the next two years”. While Wheeler noted that there has been some moderation in house price inflation he also warned that the increase in net immigration inflow would “remain an offsetting influence”. The statement also reiterated warnings that the strength of the NZD is a “headwind to the tradables sector” and that the speed and extent to which the OCR will be raised will depend on economic data and the RBNZ’s “continuing assessment of emerging inflationary pressures””.
NZD/USD Levels
The 20 DMA is 0.8377, the 50 DMA is 0.8310 and the 200 DMA is 0.8154. RSI (14) reads 74.87. Supports are ascending from 0.8435, 0.8455, 0.8492, 0.8513. Spot is 0.8599 while resistances are 0.8586, 0.8643, 0.8676 and 0.8733.