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13 Jun 2014
NZD/USD: Sellers show up at 0.87 but longs ruling the roost
FXStreet (Bali) - The Kiwi was the real champ of Thursday, surging over 2 times its normal daily ATR 14, only stalling its rise at the critical resistance in the 0.87 area, with price now at 0.8675.
Following Thursday's RBNZ rate hike by 25bp to 3.25%, Governor Wheeler gave reassurance to market participants that the RBNZ may want to set interest rates in New Zealand at a neutral level (4.5-5%) sooner rather than later, resulting in the anticipation of yet another rate hike in July against early Sept expectations. As per economic data in New Zealand, the NZ Business PMI was published a few hours ago, coming at 52.7 vs 54.2 prior, revised down from 55.2. Despite the decline, it is the 20th month in expansionary levels, which is determined by readings above the 50.00 mark.
Technically, Jim Langlands, Founder at FXCharts, notes: "The 4 hourlies are now at overbought extremes so the upside today may be a bit limited but the dailies are pointing north and once above 0.8700 we look to be in for a test of the years highs at 0.8778 (6 May) and maybe even the 2013 high at 0.8842. The downside today could see a dip back towards 0.8660 and possibly to 0.8640, which if seen should see good buying interest."
Following Thursday's RBNZ rate hike by 25bp to 3.25%, Governor Wheeler gave reassurance to market participants that the RBNZ may want to set interest rates in New Zealand at a neutral level (4.5-5%) sooner rather than later, resulting in the anticipation of yet another rate hike in July against early Sept expectations. As per economic data in New Zealand, the NZ Business PMI was published a few hours ago, coming at 52.7 vs 54.2 prior, revised down from 55.2. Despite the decline, it is the 20th month in expansionary levels, which is determined by readings above the 50.00 mark.
Technically, Jim Langlands, Founder at FXCharts, notes: "The 4 hourlies are now at overbought extremes so the upside today may be a bit limited but the dailies are pointing north and once above 0.8700 we look to be in for a test of the years highs at 0.8778 (6 May) and maybe even the 2013 high at 0.8842. The downside today could see a dip back towards 0.8660 and possibly to 0.8640, which if seen should see good buying interest."