NZD: The Reserve Bank of NZ has left the Official Cash Rate unchanged at 3.5 percent today. The New Zealand economy continues to grow at an annual rate of around 3 percent supported by low interest rates, higher net immigration, construction activity, and fall in fuel prices. House price inflation is elevated in Auckland. However, lower dairy incomes, lingering effects of drought, fiscal consolidation, and higher exchange rate are weighing on the outlook for growth. On a trade-weighted basis, the New Zealand dollar continues to be unjustifiably high and unsustainable in terms of New Zealand's long-term economic fundamentals. The timing for further adjustments in the OCR is likely to depend on the inflationary pressure in both the non-traded and traded sectors.
Technical view: Immediately after the RBNZ policy meeting, traders started selling off the kiwi against AUD, EUR, and GBP. The crosses EUR/NZD & GBP/NZD gave a bullish inverse head and shoulder break on the higher side.
EUR/NZD: The cross edged higher and made the double bottom at 1.4174, which was a low back in April 28, and changed the direction. The cross managed to close above 20&50 dsma at yesterday's session. It gained 3% closed at the highest point of the day. Today, the cross has opened on a bullish bias trading at 1.4558 compared to 1.4474. Currently, the cross is trading at a 5-week high and above the previous swing in the daily chart. In all time frames, the near and medium-term trends favor buyers. In the near term, we expect bulls to challenge 1.4685 and 1.4785 In the medium term, the levels of 1.4820, 1.4860, and 1.4930 are likely to be challenged. At the Asian session, a big spike took place. Those who wish to join this cross bull's party start buying between 1.4540 and 1.4390 use sl 1.4170.
