25 Jul 2013
NZD/USD popped higher on rate decision; 0.8053 resistance still there, though
FXstreet.com (Barcelona) - The NZD/USD bounce from Wednesday’s lows failed at short-term “correction resistance” at 0.7978 – below even the more critical macro resistance at 0.8053 – despite New Zealand’s interest rates remaining unchanged.
New Zealand’s central bankers not giving in to weak Chinese data
At 21:00 GMT Wednesday night, the Reserve Bank of New Zealand caught some market watchers by surprise when they decided to leave their target interest rates unchanged. They were confident about the country’s organic economic growth prospects and expressed some concern about having to manage rapid housing price inflation in parts of New Zealand. They noted that economic prospects seemed to be improving in the US and parts of Europe but acknowledged continuing difficulties in China and Japan.
The lack of a move by the RBNZ came on the heels of yesterday’s surprisingly weak Chinese PMI data which served to weigh down most of the region’s currencies. The NZD/USD cross bounced noticeably following the RBNZ announcement, but failed to conquer even the short-term projected “correction resistance” at 0.7978.
NZD/USD key technical levels
As noted above, the very short-term hurdle for the NZD/USD cross to conquer rests at 0.7978. Above that, technicians note that the key “correction resistance” for NZD/USD comes in at 0.8053. If a breakout above that level occurs, the next resistance will come into play at 0.8182. Short-term support for NZD/USD comes in at the intraday low from Wednesday at 0.7904 and is followed by last Tuesday / Wednesday’s lows at around 0.7850.
New Zealand’s central bankers not giving in to weak Chinese data
At 21:00 GMT Wednesday night, the Reserve Bank of New Zealand caught some market watchers by surprise when they decided to leave their target interest rates unchanged. They were confident about the country’s organic economic growth prospects and expressed some concern about having to manage rapid housing price inflation in parts of New Zealand. They noted that economic prospects seemed to be improving in the US and parts of Europe but acknowledged continuing difficulties in China and Japan.
The lack of a move by the RBNZ came on the heels of yesterday’s surprisingly weak Chinese PMI data which served to weigh down most of the region’s currencies. The NZD/USD cross bounced noticeably following the RBNZ announcement, but failed to conquer even the short-term projected “correction resistance” at 0.7978.
NZD/USD key technical levels
As noted above, the very short-term hurdle for the NZD/USD cross to conquer rests at 0.7978. Above that, technicians note that the key “correction resistance” for NZD/USD comes in at 0.8053. If a breakout above that level occurs, the next resistance will come into play at 0.8182. Short-term support for NZD/USD comes in at the intraday low from Wednesday at 0.7904 and is followed by last Tuesday / Wednesday’s lows at around 0.7850.