NZD/USD struggles to build on RBNZ-led gains
After spiking up to 0.7280 in the early Asian session on RNBZ's statement, the NZD/USD pair eased to mid-0.72s in the European session and is having a difficult time gathering momentum. As of writing, the pair is trading at 0.7265, up 0.8% on the day.
In its June meeting, the Reserve Bank of New Zealand (RBNZ) decided to leave the official cash rate unchanged at 1.75%. However, the concerns over a potential real-estate bubble seem to have eased as the bank said that the house price inflation has moderated further and the moderation is expected to continue. Although the initial reaction triggered an NZD buying wave, the overall neutral tone of the bank's statement didn't allow a sustained rise in the NZD/USD pair.
- RBNZ: Holds OCR on hold, maintains neutral stance - Westpac
- RBNZ: Staunchly Neutral – TDS
On the other hand, the US Dollar Index continues to trade in a narrow range above the 97 handle, suggesting that investors are not eager to sell their USD's yet. As of writing, the index is at 97.23, virtually unchanged on the day.
Technical outlook
Despite today's upsurge, the NZD/USD pair is flat on a weekly basis. With a decisive break above 0.7315 (June 14 high), the pair could aim for fresh 2017 highs above 0.7375 (Feb. 7 high) and reach for 0.7480 (Sep. 7 2016 high). On the downside, 0.7235 (10-DMA) could be seen as the first technical support ahead of 0.7185 (Jun. 15 high) and 0.7100 (psychological level).
- NZD should respond to oil prices – Westpac