NZDUSD – New Zealand Dollar Under Pressure, RBNZ Keeps Rates Unchanged
Aayush Jindal
Key Highlights
The New Zealand dollar recently failed to break the 0.7375 resistance against the US Dollar and declined.
The NZDUSD pair broke a major support at 0.7300, as there was a bullish trend line on the 4-hours chart.
The RBNZ Interest Rate Decision was announced by the Reserve Bank of New Zealand in which the central bank made no changes in rates from 1.75%.
The New Zealand Building Permits released by the Statistics New Zealand posted a decline of 7.2% in Dec 2016.
NZDUSD Technical Analysis
The New Zealand was under a heavybearish pressure recently against the US Dollar, as it failed near 0.7375. The NZDUSD pair is currently trading below a major support area, and remains at a risk.As can be seen from the 4-hours chart, there was a bullish trend line at 0.7300, which was preventing the downside move. A proper close below 0.7300 and the trend line might now ignite further declines in the near term.On the upside, the pair faces resistance near the 23% Fib retracement level of the last decline from the 0.7375 high to 0.7224 low. In short, more losses are likely in NZDUSD, and rallies could be sold near 0.7260-80.
RBNZ Interest Rate Decision
Today, the RBNZ Interest Rate Decision was announced by the Reserve Bank of New Zealand. The forecast was of no change in rates from 1.75%, and the result was as expected.A few key highlights from the Monetary Policy Statement are:
The recovery in commodity prices and more positive business and consumer sentiment in advanced economies have improved the global outlook.
New Zealand’s financial conditions have firmed with long-term interest rates rising and continued upward pressure on the New Zealand dollar exchange rate.
Economic growth in New Zealand has increased.
Headline inflation has returned to the target band.
Monetary policy will remain accommodative for a considerable period.
New Zealand Building Permits
The New Zealand Building Permits figure was also released today by the Statistics New Zealand. The market was expecting a decline of around 6% in Permits in Dec 2016, compared with the previous month.The result was on the lower side, as there was a decline of 7.2% in Dec 2016. It looks like there is hardly anything for the NZD bulls at the moment, which puts NZDUSD at a risk of a decline towards 0.7200.
As can be seen from the 4-hours chart, there was a bullish trend line at 0.7300, which was preventing the downside move. A proper close below 0.7300 and the trend line might now ignite further declines in the near term.On the upside, the pair faces resistance near the 23% Fib retracement level of the last decline from the 0.7375 high to 0.7224 low. In short, more losses are likely in NZDUSD, and rallies could be sold near 0.7260-80.
The result was on the lower side, as there was a decline of 7.2% in Dec 2016. It looks like there is hardly anything for the NZD bulls at the moment, which puts NZDUSD at a risk of a decline towards 0.7200.