NZD/USD testing the 0.69 key handle with RBNZ cash rate looming
The NZD/USD is trading into the 0.6900 handle once again after climbing into 0.6921 in early Monday action, breaking above Friday's highs but quickly reversing direction and retracting from its bullish swing as the US continues to accelerate tensions with China over cross-border investment and trade between the two countries.
The Kiwi has lifted against the Greenback from a low of 0.6825 last week, with the NZD/USD staging a bounce and reversal after declining from June's high of 0.7060. The bullish correction is now under threat, and a continued reversal of risk appetite in Monday's trading could see the pair continue declining ahead of the Reserve Bank of New Zealand's (RBNZ) next showing.
The RBNZ is set to make another appearance this week in front of global markets on Wednesday at 21:00 GMT, though little of note is expected to change in the RBNZ's policy statements, with economists flatly projecting the RBNZ's cash rate to remain steady at 1.75%, while a majority of Reuters-polled economists also expect the New Zealand central bank to remain unchanged on rates well into the 4th quarter of 2019.
Alterations to the RBNZ's wording may be expected by traders this week as the central bank has said recently that it doesn't want to adhere to strict statement language looking forward, so a simple change of words will not signal a change in policy for the RBNZ. Reactions could be over-drawn following the upcoming release, but a lack of adjustment in the underlying statements will see the Kiwi resume its trading stance through the reporting window.
NZD/USD levels to watch
The pair's bounce from June's low at 0.6825 is quickly running into resistance from the 50-period MA on H4 charts near 0.6925, and a bullish continuation will be capped off by June's highs near 0.7050, while a bearish rollover from here will find quick support nearby at mid-May's previous low of 0.6850, with further support nearby at June's current low.