NZDUSD @ 0.63804 – Support/Resistance analysis: marches towards 0.6400 on RBNZ’s 50 bps rate hike

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NZDUSD @ 0.63804 – Support/Resistance analysis: marches towards 0.6400 on RBNZ’s 50 bps rate hike

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• NZD/USD spikes up to refresh intraday high after RBNZ rate lift.
• RBNZ matches market forecasts of 50 bps rate hike, signals suitability for further tightening.
• Resumption of downside in the US Treasury yields, mildly offered stock futures to exert downside pressure on Antipodeans.
• Comments from China’s Xi, softer NZ PPI teased Kiwi sellers earlier.

The pair currently trades last at 0.63804.

The previous day high was 0.6393 while the previous day low was 0.6317. The daily 38.2% Fib levels comes at 0.6346, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6364, expected to provide support.

NZD/USD takes the bids to refresh intraday high near 0.6365 as bulls cheer the Reserve Bank of New Zealand’s (RBNZ) 50 basis points (bps) rate hike during Wednesday’s Asian session.

Although the RBNZ matched expectations of a 50 bps rate hike, to 3.0%, optimism from the quarterly Monetary Policy Statement seemed to have favored the NZD/USD bulls of late.

Also read: Breaking: RBNZ Raises OCR By 50bp to 3.00% as expected, kiwi pops to 0.6365

However, fears surrounding China, Europe, as well as a cautious mood ahead of the key data/events, challenge the Kiwi pair buyers of late.

China’s Premier Li Keqiang recently crossed wires, via the Communist Party’s flagship newspaper People’s Daily, while urging local officials from six key provinces that account for about 40% of the country’s economy to bolster pro-growth measures. On Wednesday, President Xi Jinping and state planner National Development and Reform Commission (NDRC) showed readiness for more measures to combat the recession fears.

Given the dragon nation’s trade ties with the Pacific, as well as the status of being the world’s biggest commodity user, any negatives for Beijing weigh on the Antipodeans like NZD/USD.

While portraying the sentiment, US 10-year Treasury yields fade the previous day’s rebound while S&P 500 Futures retreat from a four-month high.

Having witnessed the initial reaction to the RBNZ’s moves, the NZD/USD pair traders will pay attention to comments from Governor Adrian Orr for fresh impulse. Following that, the US Retail Sales for July, expected 0.1% versus 1.0% prior, as well as the Federal Open Market Committee (FOMC) meeting minutes, for clear directions. Also important will be the headlines concerning China and the recession.

Unless providing a daily closing below the monthly support line, around 0.6260 by the press time, NZD/USD buyers remain hopeful. However, a downward sloping trend line resistance, close to 0.6460 at the latest, challenges the upside momentum.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.6334 at the time of writing. Pair opened at 0.6347 and is trading with a change of -0.20% % .

The pair is trading above its 20 Daily moving average @ 0.63, above its 50 Daily moving average @ 0.6267 , below its 100 Daily moving average @ 0.643 and below its 200 Daily moving average @ 0.6615

The previous day high was 0.6393 while the previous day low was 0.6317. The daily 38.2% Fib levels comes at 0.6346, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6364, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6312, 0.6276, 0.6235
• Pivot resistance is noted at 0.6388, 0.6428, 0.6464

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