NZD/USD surges to 8-day high on hawkish comments from RBNZ's Wheeler

The NZD/USD pair maintained its strong bid tone and is now building on to its gains above 0.7300 handle to currently trade at 8-day high around 0.7320-25 band. 

The major gained traction after RBNZ Governor Graeme Wheeler dumped expectations of rapid monetary easing by the central bank. Wheeler added that speeding up interest rate cuts could be unsustainable and further fuel already overheating property market. 

Tuesday's up-move lifted the pair close to a multi-month high level touched on August 11 in the aftermath of RBNZ's announcement to cut its benchmark interest-rates by 25 bps, which was less than market expectations.

With a relatively lighter US economic calendar on Tuesday, featuring the release of new home sales and Richmond Manufacturing Index, the pair might continue to benefit from a broadly weaker greenback.

Technical levels to watch

From current levels, August monthly high near 0.7340 level remains immediate barrier, which if conquered sets the stage for continuation of the pair's near-term upward trajectory further towards 0.7395 (May 22, 2015 high). A follow through buying interest above 0.7395-0.7400 resistance should pave way further appreciating move for the pair in the near-term.

Meanwhile on the downside, previous strong resistance near 0.7285-80 region now seems to protect any weakness below 0.7300 handle. Any further fall below 0.7280 support area might now be bought into and hence, should be limited by support at 0.7250 level.