NZD/USD Rallying Hard After RBNZ Maintained Staus-Quo
The NZD/USD pair surged to 0.7147, its highest level since June 2015, after the RBNZ decided to hold its key benchmark rates unchanged at 2.25%.
Heading into the announcement, the pair had been climbing higher despite of being underpinned by expectations a 25bps rate cut by RBNZ. After a surprise rate-cut in March, RBNZ hinted toward further easing during its monetary policy announcement in April.
However, a status-quo monetary policy produced a knee-jerk reaction and took bears off-guard, boosting the kiwi through 2016 highs strong resistance near 0.7050 area. Meanwhile, the central bank also upgraded its CPI outlook and now see inflation reaching 2% by Q4 of 2017 ahead of Q1 2018 previous forecasted.
A fresh bout of buying interest assist the pair further beyond 0.7100 handle to over 1-year high level near 0.7150 and a follow-through momentum might continue boosting the pair in the near-term.
Technical levels to watch
From current levels, momentum above 0.7150-70 zone is likely to get extended towards June 2015 highs resistance near 0.7230-35 area before the pair aims towards reclaiming 0.7300 handle.
Meanwhile on the downside, weakness below 0.7100 handle support might now get bought into and hence is likely to be limited by a previous strong resistance, now turned immediate strong support, near 0.7060-50 region.