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FxWirePro: NZD/USD upside pauses at 20-dma, finds little impetus from china’s mixed inflation data

NZD/USD upside pauses at 20-dma, finds little impetus from china’s mixed inflation data

  • RBNZ left rates unchanged, but the Kiwi found support from the policy announcements, with the outlook for an early 2019 hike maintained.
  • RBNZ left the Official Cash Rate (OCR) unchanged at 1.75 percent forecasting rates rising in Q2 2019 vs Q3 previously.
  • The statement underpinned the notion that inflation target will be achieved while the RBNZ is comfortable with the level of the bird currently.
  • NZD/USD made fresh highs post RBNZ presser, broke above 20-DMA at 0.6965.
  • However, upside struggling to extend gains as China’s mixed inflation data provided little impetus.
  • China’s Consumer Price Index (MoM) (October) came in at 0.1% vs 0.2% expected.
  • Meanwhile, China’s Producer Price Index (YoY) (October) arrived at 6.9% vs 6.6% expected and 6.9% last.
  • Technical studies are bullish, break above 0.6965 could see further upside. While 5-DMA at 0.6933 is immediate support and we see weakness on break below.
  • Focus today will be the US tax reforms, which is expected to have a significant impact on the USD price-action.

Support levels – 0.6933 (5-DMA), 0.69, 0.6818 (double bottom), 0.68

Resistance levels – 0.6965 (20-DMA), 0.6968 (May 3rd high), 0.7038 (38.2% Fib of 0.61968 to 0.7558 rally)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-extending-gains-for-3rd-successive-session-eyes-20-DMA-at-06995-987890) has hit TP1.

Recommendation: Book partial profits at highs. Raise trailing stops to 0.6930. Watch out for break above 20-DMA for further upside.

 

Our chart for the call:

 

M2M runs trading Signals services, you can get our trading signals App here: https://play.google.com/store/apps/details?id=com.icanappz.m2m

 

FxWirePro Currency Strength Index: FxWirePro’s Hourly NZD Spot Index was at 41.2602 (Neutral), while Hourly USD Spot Index was at 3.40878 (Neutral) at 0420 GMT.

Source: FXWire Technicals

 

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