New Zealand dollar spikes after the RBNZ decision
The New Zealand dollar rose slightly after the Reserve Bank of New Zealand (RBNZ) interest rate decision. The bank left the main interest rate unchanged at 0.25% and the target of its quantitative easing program at N$100 billion. Further, its lending program for businesses will also continue. In a statement, the bank's governor said that the country needed more support to emerge from the pandemic.
The price of crude oil declined slightly as traders reacted to the latest inventories data by the American Petroleum Institute (API). Inventories rose by more than 1 million barrels last week after falling by more than 5.8 million barrels in the previous week. This increase was mostly due to Texas, where people are staying at home amid extreme weather events. It was the first time in five weeks that the number of inventories has risen. The EIA will publish its latest inventories data later today.
The US dollar remained on the defensive in overnight trading as the market digested the latest Jerome Powell testimony. In it, he said that the country’s economy still needed substantial support even as inflation started rising. He reiterated that recent gains of Treasury yields were a sign that the market was confident about the economy. Later today, the key numbers to watch will be the German GDP data and US new home sales numbers.
The NZD/USD price rose to 0.7383 after the RBNZ interest rate decision. This was the highest level it has been in more than two years. On the four-hour chart, the price rally is supported by the short and longer moving averages. The oscillators too are rising. Therefore, the pair will likely continue rising as bulls attempt to move to the next resistance at 0.7400.
The EUR/USD pair is trading at 1.2157, which is slightly below yesterday's high of 1.2170. On the four-hour chart, the pair seems to be forming a substantial resistance near the current range. It is also slightly below the important resistance at 1.2190, which was highest on January 22. The pair may experience a bullish break-out in the next few days.
The GBP/USD rally accelerated in the overnight session. It rose to 1.4166, the highest level in almost three years. The pair has moved above the moving averages while the MACD has also risen. The price is also along the upper line of the Bollinger Bands. Therefore, while the upward trend will likely remain, a short term pullback or consolidation may also happen.