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NZD/USD aiming to recoup losses, RBNZ main interest

FXStreet (Bali) - NZD/USD is trading around the 0.7850 vicinity after last week's low NZ CPI hungover, which saw some institutional banks revise their next RBNZ rate hike calls to Q3 even Q4 2015.

Market sources are reporting minimal a trading activity in the main FX platforms along Asian hours, with traders in a wait-and-see mode ahead of Thursday's RBNZ monetary policy decision.

As mentioned by Jim Langlands, Founder at FXCharts, the low inflation reported last week in New Zealand, "may see danger for the Kiwi to the downside this week if the RBNZ takes a more dovish tone following the recent cycle of tightening rates."

On the next RBNZ meeting, it will be key for NZD traders to monitor whether the Central Bank sets next policy guidance data dependent or keeps encouraging NZD bears by keeping the 'extended pause' rhetoric.

Technically, Jim notes that for now, "the topside looks capped now at 0.7880 although we could see a squeeze back to 0.7900. The downside will again see bids at 0.7790/0.7800 and for now that should hold it."

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