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NZD/USD rallies more than 1% and retraces the 0.6450 level

  • NZD/USD extends previous gains as USD remains heavy.
  • The RBNZ is on track to raise OCR by 50 basis points at its May policy meeting.
  • Mixed news out of China caps NZD bulls as investors turn cautious.

The NZD/USD has hit fresh three-week highs at 0.6476 during the Asian session on Monday, before entering consolidation mode ahead of the European open.

The NZD/USD rally could be related to a combination of factors as we head into the week of the Reserve Bank of New Zealand (RBNZ) monetary policy meeting.

NZD bulls remain hopeful amid expectations of a 50bp rate hike by the RBNZ this Wednesday. The latest report published by the New Zealand Institute of Economic Research (NZIER) revealed that “the majority opinion among Shadow Board members was that the official cash rate (OCR) should be increased by 50 basis points at the May meeting“.

The NZD/USD pair also benefited from the general decline in the US dollaras investors continued to trim their bullish bets on the dollar, extending the correction that had already occurred from two-decade highs.

Besides, regime change in Australia, with a Labor Party-led government now in power, also fueled optimism around the Antipodes. Meanwhile, New Zealand Prime Minister Jacinda Ardern is reported to lead a trade delegation to the United States this week.

Although the Mixed news on the coronavirus coming from the Chinese capital, Beijing, kept investors on edge. Earlier in the Asian session, it was reported that the city had registered a record of covirus cases. But later, the South China Morning Post (SCMP) reported, citing sources, that Beijing was considering relaxing quarantine policy amid investor angst.

All eyes are now on the outcome of Wednesday’s RBNZ currency policy for the next big NZD move. Until then, the broader market tone and dollar price action will continue to be the main catalysts.

NZD/USD technical levels

NZD/USD

Panorama
Last Price Today 0.6462
Today’s Daily Change 0.0071
Today’s Daily Change % 1.11
Today’s Daily Opening 0.6391
Trends
20 Daily SMA 0.6404
50 Daily SMA 0.6679
100 Daily SMA 0.6704
200 Daily SMA 0.6838
levels
Previous Daily High 0.6415
Previous Daily Minimum 0.6363
Previous Maximum Weekly 0.6417
Previous Weekly Minimum 0.6229
Monthly Prior Maximum 0.7035
Previous Monthly Minimum 0.6451
Daily Fibonacci 38.2% 0.6395
Daily Fibonacci 61.8% 0.6383
Daily Pivot Point S1 0.6364
Daily Pivot Point S2 0.6337
Daily Pivot Point S3 0.6312
Daily Pivot Point R1 0.6416
Daily Pivot Point R2 0.6442
Daily Pivot Point R3 0.6469

Source: Fx Street

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