NZD/USD bulls find support on 0.6450 structure, eye a break into 0.65s
- NZD/USD targets a break of the 0.65 handle as RBNZ remains on hold, but vigilant.
- Coronavirus showing signs of slowing down is lifting spirits and the kiwi.
The NZD has held form above a critical target following the Reserve Bank of New Zealand yesterday and has eyes for a test of the 0.65 handle on a relatiely hawkish statement in so much that the central bank has ruled out a rate cut for 2020.
In yesterday's announcement, there was a minimal, but nonetheless still a chance, that the RBNZ would cut interest rates, as an insurance against a downturn in the economy due to the immediate threats of the coronavirus and uncertainties for how severe the situation could get. However, the strong assurance from the central bank stating, "no chance of a rate cut in 2020", enabled the bird to take flight, despite the RBNZ saying that low interest rates remain necessary.
NZD/USD rallied from the 0.6410 area to break a key resistance area in the 0.6450s and has been eyeing up a test of 0.65 the figure ever since holding the 0.6450s as a new support structure for this cycle of price action. Indeed, the upside bias is intact for a test of the 0.65 handle as described in NZD/USD Price Analysis: How will the RBNZ affect NZD/USD?.
In early New Zealand hours today, governor Adrian Orr has been speaking again in Wellington, pretty much repeating what was said yesterday. More on that here: RBNZ gov. Orr: Coronavirus poses downside risks to outlook
Meanwhile, in a rest bite from the initial fears of a global pandemic spiralling out of control which took centre focus for the start of this year and weighed heavily on risk appetite, in the latest updates, we have had notice that the number of cases of infection with the new coronavirus in China has stabilised. However, the World Health Organization cautioned that this apparent slowdown in the epidemic spread should be viewed with "extreme caution", the head of the WHO said on Wednesday. More on that here: Coronavirus cases stabilise, but outbreak could go any way - Reuters News
NZD/USD Price Analysis: How will the RBNZ affect NZD/USD?