Recently, the global investors have been able to observe the dynamic decreases in the NZD/USD currency pair. The decreases were mainly caused by the strengthening US dollar, which brought the price around local support located in the price region of 0.6950.However, the current trend may be reversed tomorrow, when we will learn the decision of the Reserve Bank of New Zealand, which will decide on the interest rates. The consensus points to maintaining current levels at 1.75%. Everything will therefore depend on the overtone of the monetary policy statement.
In the case of the hawkish statement of the Central Bank of New Zealand and the increased possibility of interest rate hikes in the near future, the market participants should witness a defense of the currently tested level of support and recovery at least near 100% geometry slightly above the round 0.7000 level. In a case of an extension to the upside, the next target is seen at the level of 0.7055.
On the other hand, assuming that the neutral or dovish RBNZ attitude is maintained as to further monetary policy, the most likely scenario will be the continuation of the move towards the south. If the level 0.6945 is breached, the road to attack for a last month low in the area of 0.6820 will open.
