NZD/USD slips below 0.7300 even as NZIER shadow board backs RBNZ status-quo

NZD/USD eases from seven-week high following NZIER shadow board comments.
NZIER shadow board favors no change in RBNZ policies as improving outlook balancing high degree of uncertainty.
Broad US dollar weakness favored kiwi bulls as NZ yields jumped to multi-month top.
Light calendar in Asia needs risk catalyst for fresh direction.

Anil Panchal FXStreet

NZD/USD drops to 0.7290 while consolidating Friday’s heavy gains, the biggest since January 05, during the initial Asian session on Monday. In doing so, the kiwi buyers ignore upbeat comments from the New Zealand Institute of Economic Research (NZIER) ‘shadow board’. However, the US dollar weakness and risk-on mood seem to defy the bears’ entry.

NZIER shadow board says no need for further stimulus…

NZIER’s latest report ahead of Wednesday’s monetary policy meeting of the Reserve Bank of New Zealand (RBNZ) turns down the need for any further easing in the bank’s monetary policies, which in turn tone down hopes of dovish comments from the New Zealand (NZ) central bank.

The report from the independent board said, “There was a wide range of views amongst board members. For the upcoming meeting, members were generally in favor of leaving the monetary policy stance unchanged given the improving outlook balanced against the high degree of uncertainty.”

It should, however, be noted that the market optimism joins US dollar weakness to keep the NZD/USD bulls hopeful. By the end of Friday, the US dollar index (DXY) marked the second consecutive weekly loss for the first time in 2021 despite the jump in the US 10-year Treasury yields. The reason could be traced from the market’s optimism backed by the gradual removal of the coronavirus (COVID-19)-led activity restrictions and steady vaccinations, not to forget the US covid stimulus hopes.

Amid these plays, NZ 10-year yields are the highest in the G10 while the Asia-Pacific equities trade near record top.

Looking forward, NZD/USD traders make take intermediate clues from risk catalysts ahead of the RBNZ meeting. The Australia and New Zealand Banking Group (ANZ) said, “We expect a cautious tone and so does the market, but if the tone surprises one way or the other, a more hawkish tone would see the market react more. The market is just not in the mood for dovish talk, but it eagerly digests good news stories.”

Technical analysis

NZD/USD failures to cross the yearly top of 0.7316 signals pullback of the quote towards the previous resistance line from January 13, currently around 0.7260.

Additional important levels

Overview
Today last price	0.729
Today Daily Change	-8 pips
Today Daily Change %	-0.11%
Today daily open	0.7298

Trends
Daily SMA20	0.7206
Daily SMA50	0.7168
Daily SMA100	0.6989
Daily SMA200	0.6761

Levels
Previous Daily High	0.7316
Previous Daily Low	0.7203
Previous Weekly High	0.7316
Previous Weekly Low	0.7158
Previous Monthly High	0.7316
Previous Monthly Low	0.7096
Daily Fibonacci 38.2%	0.7273
Daily Fibonacci 61.8%	0.7246
Daily Pivot Point S1	0.7229
Daily Pivot Point S2	0.716
Daily Pivot Point S3	0.7116
Daily Pivot Point R1	0.7341
Daily Pivot Point R2	0.7385
Daily Pivot Point R3	0.7454

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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