24 June, 2019 | Axiory - This time it's all about the Reserve Bank of New Zealand, thus the NZDUSD pair will most likely be volatile over the next days.
Will RBNZ send Kiwi lower?
On Tuesday, New Zealand trade balance for May will be released, but these data rarely cause any major movements on the NZDUSD pair, unless a big deviation to expectations comes out.
Wednesday will bring the mentioned RBNZ monetary policy decision and considering the latest dovishness everywhere (ECB, Fed, BoE, and especially the Antipodean neighbor – The RBA), the central bank is expected to sound very dovish and possibly point at further rate cuts. This will most likely send the New Zealand dollar sharply lower.
The Official cash rate is now at 1.5% and it could be reduced, should other central banks continue to cut rates.
Later on Wednesday, US durable goods are seen improving somewhat, which could support the greenback and weigh further on the NZDUSD pair.
On Thursday, the final print of US Q1 GDP is due and investors expect it to remain at 3.1% annualized. The GDP priced index should stay at 0.8%, which is rather weak.
The most important event on Friday will be the G20 summit, where Trump is expected to talk with Xi regarding the ongoing trade conflict and investors will be closely watching this meeting, whether the two sides could reach an agreement, or the trade war will continue. Volatility is expected to be high on Friday and also over the weekend, which could result in large gaps on Sunday evening.
NZDUSD technical analysis
The US dollar has been weakening over the last days, and this has brought the NZDUSD pair back into the trading range between 0.6680 and 0.6500.
The current resistance seems to be located near 0.66 and if bulls push the pair above this level, further gains toward 0.6635 and 0.6680 could occur.
On the downside, should the RBNZ sound dovish, the supports are at 0.6550 and near the 0.6500 level. The kiwi needs to decline below the current cycle lows at 0.6480 to confirm the long-term bearish trend.
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