The Kiwi is Looking to Crack a Big Support Level: RBNZ Looms
Rowan Crosby • 1 min read
While the attention of the world is on the FOMC and what’s in store for the USD, there’s another central bank decision hours later.
That’s the RBNZ.
The predictions are for the OCR to be left on hold at 1.75% There’s no real reason for a change of pace for the RBNZ. They still have concerns over low inflation and they don’t want to see a high NZD.
A high dollar hurts the value of their exports and the NZD is an export economy.
So with that in mind, it’s interesting that we are currently testing what is a pretty big support level at 0.7200.
At the moment we are a touch under that level, as the USD found its mojo yesterday and put in a strong showing.
I can see the NZD/USD falling to 0.7100 in the near future. What interests me the most is how the USD is going to react later today after the FOMC.
Given the fact that the rate hike is all but a certainty, the scope for upside might be limited. That means there might be downside risk.
Either way, if we can hold below 0.7200 and navigate the FOMC, then I’ll be looking for the next leg lower here.
NZD/USD – 240 min Chart.