NZD/USD Off Session Low but Still Weak at 0.6930
The NZD/USD pair has managed to recover from an early dip to 0.6900 handle to currently trade near 0.6930 amid thin liquidity on the back of New-Zealand bank holiday in observance of the Queen’s Birthday.
The pair last week registered a remarkable recovery from nearly two-month low level of 0.6675 and surged to one-month high level of 0.6960 on disappointing headline NFP and ISM non-manufacturing PMI numbers from the US.
The pair, however, retraced a bit on Monday and dropped to 0.6900 handle on broad US Dollar recovery and as traders might be inclined to take some profits off the table ahead of RBNZ monetary policy decision, later during the week.
RBNZ is scheduled to announce its monetary policy decision on Thursday, where consensus is pointing to a 25bps rate cut to bring down benchmark interest rates down to 2.0% from current 2.25%. Expectations of a yet another rate-cut in a span of 4-months might restrict any further near-term up-move for the pair.
Technical levels to watch
From current levels 0.6950-60 area remains immediate resistance to clear, which if conquered seems to assist the pair back above 0.7000 handle towards testing its next major resistance near 0.7045-50 area. On the flip side, sustained weakness below 0.6900 is likely to get extended towards 0.6850-45 strong support, nearing 50-day SMA region. A decisive weakness back below 50-day SMA might negate any further bullish momentum, turning the pair vulnerable to further downside in the near-term.