- NZD/USD has retreated above 0.6700 on Monday despite global equities falling on geopolitical tensions.
- The pair points to a break above the key resistance at 0.6735, which would open the door towards 0.6800.
- NZD bulls are in charge ahead of this week’s key RBNZ meeting, amid talk of a 50bp hike.
Despite the sharp decline in the global equity space due to further escalation in military tensions between pro-Russian and Ukrainian separatist/Russian forces, as well as ongoing Russia-NATO tensions in the background, the NZD/USD has managed to pull back above 0.6700 on Monday. As this Wednesday’s RBNZ meeting looms, with market participants split between expecting a 25bps or 50bps hike, the pair has gained 0.4% on the session and is one of the best in the G10 on day.
NZD/USD bulls are intent on testing previous monthly highs at 0.6730, although growing geopolitical angst continues to weigh heavily on other risk assets (such as equities) and could still crash the party. This is a key support turned resistance area so far in 2022 and a break above it would open the door for a pullback towards 0.6800 and yearly highs near the 0.6900 level. Geopolitics aside, although Wednesday’s RBNZ meeting takes center stage this week, Friday’s NZ Q4 retail sales figures will be important for kiwi traders.
There will also be plenty of US data and Fed statements to watch, with highlights including Preliminary February PMIs, Second Q4 GDP Growth Estimate and January Core PCE Inflation . Markets have reduced bets on a 50bp rate hike in March after key FOMC members opposed the idea last week. A positive core PCE reading, coming on the heels of elevated consumer and producer price inflation readings in January, would bolster expectations of a rapid series of rate hikes between now and the end of the year.
Additional technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
