New Zealand Dollar is trading with a soft tone in Asian session today. While a rate hike is expected from RBNZ this week, there are chatters of the possibility of smaller hike, or even a pause, in response to the damage done by cyclone Gabrielle. There are also some speculations of a slight dovish twist which might signal a lower terminal rate. But traders will still need to wait for RBNZ Governor Adrian Orr’s statement before making adjustment on their bets.
For now, AUD/NZD is extending the rally from 1.0469 despite loss of upside momentum. Further rise is expected as long as 1.0961 support holds. Sustained trading above 61.8% projection of 1.0469 to 1.0935 from 1.0735 at 1.1023 could prompt upside re-acceleration to 100% projection at 1.1201.
As for NZD/USD, it’s still extending the fall from 0.6537, which is seen as the third leg of the consolidation pattern from 0.6512. Deeper decline is expected as long as 0.6308 minor resistance holds, for 38.2% retracement of 0.5511 to 0.6512 at 0.6130. But strong support should be seen there to bring rebound. However, sustained break of 0.6130 will raise the change of near term reversal and target 61.8% retracement at 0.5893.
