The Reserve Bank of New Zealand is set to update the market on their latest rate call this morning in the Asian trading session and traders are expecting to see moves in the currency around the event. The market consensus is for the bank to keep rates on hold at 5.50%, however it is likely to be the guidance in the statements and the press conference that will see moves in the market.
Strong recent inflation prints in the land of the long white cloud are likely to see the bank remain relatively hawkish and this could lead to some appreciation for the Kiwi dollar. The last CPI print came in at 4%, still well above the target range of 1-3% and whilst the unemployment rate jumped in the last quarterly update, many traders feel there is still more work for the bank to do. The currency is trading around the 0.6100 level having topped out just under 0.6150 on a few occasions this month but a more hawkish tone today could see those levels challenged swiftly. Whereas a more conciliatory tone would see the pair drop back into recent ranges.
Resistance 2 : 0.6217 – Double Top in March and February
Resistance 1 : 0.6140 – May High and Trendline Resistance
Support 1 : 0.6073 – 200-Day Moving Average
Support 2 : 0.5980 – May 8 Low
