RBNZ rate decision will be a major focus in the coming Asian session. There is no chance of a shift in OCR, which is currently at 1.75%. While the economy appeared to have picked up momentum in Q3, Q4 data proved that was only a false dawn. RBNZ’s today in the upcoming statement should at least switch to the absolute neutral stance. That is, the language that next move could be up or down would be reintroduced. And there is prospect for the central to even tilt more to the dovish side.
Here are some suggested readings:
- RBNZ Preview – Turning More Dovish while Affirming Next Move Can be Up or Down
- Australia & New Zealand Weekly: RBA Shifts to a More Balanced View
- RBNZ May Appear Dovish, But Not Enough to Satisfy the Bears
- Reserve Bank of New Zealand (RBNZ) – What to Expect
- Aussie and Kiwi Outlook: Storm Clouds Gathering?
- Dollar Hit by Profit-Taking; RBNZ and US CPI in Focus
NZD/USD dived sharply last week after weaker than expected job data. But the decline slowed this week, with 4 hour MACD crossed above signal line. Intraday bias is turned neutral for now. As long as 0.6773 minor resistance holds, we’d expect further decline ahead. Break of 0.6706 will pave the way to 0.6551 low.
Nevertheless, break of 0.6773 will indicate shorty term bottoming and bring stronger recovery. But even in that case, we don’t expect a break of 0.6941 resistance in near term.
