NZD/USD: awaits Reserve Bank New Zealand
The price action has been subdued on the hourly chart around the cluster of MA's and 200 SMA in particular, supported at 0.6620 on the offer from 0.6760 and end the week's business. A breakaway from the 200 SMA at 0.6633 is required in one direction or the other b,ut markets might be nervous leading into the RBNZ and prefer to wait on the sidelines.
"A cut of 25bp to 2.50% is expected by the majority surveyed. In this FX War the other option, holding rates, will paint a giant target on the NZD's forehead that says “Buy me!”. Considering the NZD trade-weighted index is up over 6% since its September low that would hardly be welcome. Remember NZD/USD was in the 40s once too...", noted analysts at Rabobank.
Technically, price has been trying to break up in a minor recovery, but has been contained by the 100 SMA on the 1hr chart at 0.6662. Bears are eyeing a deep target of 0.6578 through the 100 4hr SMA at 0.6588. A break to the downside of the 20 DMA 0.6579 and the cluster of key MA's here would be compelling while 0.6787 remains key resistance as 3rd Dec highs.
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