NZDUSD – Can New Zealand Dollar Retain Traction Post RBNZ10 November, 2016 by Aayush Jindal in Fundamental Analysis, Market Analysis, NZDUSD, Technical Analysis
NZDUSD – Can New Zealand Dollar Retain Traction Post RBNZ
- The New Zealand dollar after climbing a few pips above the 0.7400 level against the US Dollar failed.
- The NZDUSD pair is supported on the downside as long as the 0.7250 level is intact.
- Today, the RBNZ Interest Rate Decision was announced by the Reserve Bank of New Zealand, and the central bank opted to reduce rates from 2% to 1.75%.
- Later today, the US Initial Jobless Claims will be released by the US Department of Labor, which may impact the greenback.
NZDUSD Technical Analysis
The New Zealand dollar yesterday during election results spiked higher for a move towards the 0.7403 level. The NZDUSD pair later moved down, but remains supported on the downside.
There is a major bullish trend line formed on the 4-hours chart of NZDUSD, acting as a support around the 0.7270-50 area. The most important barrier for sellers is around 0.7250, as it acted as a resistance earlier, and now may act as a support.
On the upside, a break and close above the 0.7320 level is important if the pair has to continue moving higher. There were a few swing moves after the RBNZ rate decision, but the pair found buyers on the downside.
RBNZ Interest Rate Decision
Today, there was an important announcement in New Zealand. The RBNZ Interest Rate Decision was announced by the Reserve Bank of New Zealand. The market was aligned for the rate cut from 2% to 1.75%.
The outcome was as forecasted, as central bank opted to reduce rates from 2% to 1.75%. The monetary policy statement mentioned about the higher exchange rate, and stated “Weak global conditions and low interest rates relative to New Zealand are keeping upward pressure on the New Zealand dollar exchange rate. The exchange rate remains higher than is sustainable for balanced economic growth and, together with low global inflation, continues to generate negative inflation in the tradables sector. A decline in the exchange rate is needed”.
Overall, the NZD may come under a short-term bearish pressure, but overall remains supported.
US Initial Jobless Claims
Today, US Initial Jobless Claims, which is a measure of the number of people filing first-time claims for state unemployment insurance was released by the US Department of Labor.
The market is aligned for a decrease from 265K to 260K. If there is no decline, then the US dollar may face selling pressure in the short term.