NZD/USD holds on to daily gains ahead of RBNZ decision

The NZD/USD pair took advantage of the weak greenback on Wednesday and reached its highest level in seven days at 0.6950. As the US Dollar Index continues to have a difficult time making a meaningful correction in the early NA session, the pair remains near its session highs. As of writing, the pair was trading at 0.6945, up 0.73% on the day.

The next important event for the pair will take place in the early trading hours of the Asian session as the Reserve Bank of New Zealand will decide on its interest rate and release its monetary policy statement followed by a press conference. Although the general consensus is for the bank to leave the interest rate unchanged, a revision to inflation forecast could bring some volatility.

The bank adopted a neutral tone in the last few meetings, suggesting that depending on the situation the next policy move could be a cut or a hike. If the bank sounds cautious again, the pair could struggle to make a decisive move to any direction but short-term sharp fluctuations shouldn't be counted out.

• NZD should be well supported - BNZ
• RBNZ: Buy fresh kiwis – Deutsche Bank

Technical outlook

The pair faces the initial resistance at 0.6975 (50-DMA) ahead of 0.7000 (psychological level) and 0.7050 (Apr. 19 high). To the downside, supports could be seen at 0.6900 (psychological level), 0.6840 (10-month low/May 4 low) and 0.6800 (psychological level).