NZD/USD Strong Rally Halted at 0.7150, Now Trading Sub-0.7100
NZD/USD Strong Rally Halted at 0.7150, Now Trading Sub-0.7100
The NZD/USD pair has given up some of its RBNZ status-quo monetary policy led up-move and has now dropped below 0.7100 handle.
Earlier on Thursday, RBNZ surprised markets by leaving its benchmark interest rate unchanged at 2.25%. Market participants were expecting the central bank to announce a 25bps rate-cut and bring down interest rate to 2.0% from current 2.25%.
RBNZ's decision to stand pat led to further strength for the kiwi, which was already moving higher led by broader US Dollar weakness on terrible May NFP print.
The pair, however, lost upside momentum and reversed from 0.7150, erasing some of its RBNZ led gains as the greenback, as measured by the US Dollar index, found strong buying interest at lower levels.
On economic data front, US weekly jobless claims will take spotlight during NA session and is likely to drive investor sentiment surrounding the greenback.
Technical outlook
A team of Analysts at XM Investment Research notes, "The daily RSI is trending up but is entering overbought territory, which suggests that there could be some consolidation or a pullback in the near term. Support to the downside lies at the levels that previously acted as resistance (0.7053 and 0.7000)."
"As long as prices remain above the 0.70 level, this would keep the medium term bullish outlook and would see a resumption of the uptrend that started from 0.6346 back in January."
