- Oil-price rally, upbeat NZ CPI aides recovery on the 0.73 handle.
- Inflation remains below the lower end of the RBNZ target range, RBNZ to keep rates on hold?
The NZD/USD pair witnessed good two-way businesses so far this Thursday, now heading back towards the post-NZ CPI highs of 0.7343 amid a renewed buying interest seen around oil prices.
Despite upbeat Q1 NZ CPI figures, the bulls failed to sustain at higher levels and reversed to hit daily lows at 0.7309, as markets believed that the Reserve Bank of New Zealand (RBNZ) will continue to keep rates-on hold this year, with the inflation still remaining below the bottom of RBNZ target band.
However, the renewed uptick in the major is mainly driven by better sentiment towards risk assets, as reflected by higher Asian equities and ongoing rally in oil prices. The NZD/USD pair also tracks the solid gains in its OZ peer, the AUD, after the commodity currency tracked the upturn in copper prices.
Markets will continue to track the broader market sentiment for further momentum in the higher-yielding Kiwi.
NZD/USD levels to watch
FXStreet’s Analyst, Omkar Godbole, explains, “acceptance below the session low of 0.7309 would add credence to the bearish 5-day MA and 10-day MA crossover and strengthen the odds of a drop to 0.7241 (April 6 low). A violation there would expose support lined up at 0.7211 (100-day MA). On the higher side, a close above 0.7342 (session high) could yield a re-test of the recent high of 0.7395 (April 13 high) and 0.74 (psychological hurdle).”