Global macro overview for 11/08/2016:
The Reserve Bank of New Zealand has decided to cut the interest rate by 0.25% to the level of 2.0% overnight ( just as expected). During the press conference, RBNZ Governor Wheeler said, that the reason behind the rate cut is a growing concern regarding the inflation expectations and exchange rate pressures on the economy. Moreover, he said that the New Zealand economy does not currently need a 50bp cut because the RBNZ monetary policy tools are still working well and RBNZ did not run out of the ammunition yet. In conclusion, Wheeler clearly hinted, that another rate cut might be implemented if need, but not yet. It means global investors should keep an eye on the inflation data next month.
Let's now take a look at the NZD/USD technical picture in the daily time frame. As we can see the market trades above all moving averages and it even tried to rally higher after the RBNZ news release. Nevertheless, the price looks to be rejected from the last technical resistance at the level of 0.7323 and some kind of the pin bar might be forming now. If the rejection becomes clear, then the next support is seen at the level of 0.7054.
