The Central Bank of New Zealand saw a rate hike of 25bps from 2.50% to 2.75% as expected by economist in the last week’s trading session. This gave the single currency strength over its counterparts as presently the New Zealand has the highest interest rate in all major currencies.
Weekly bias in the NZD/USD remains on the upside as 21/55 EMA’s, MACD, RSI and Stochastic are all showing sign of bullish continuation on the Daily time-frame. A break of 0.86038 resistance would resume the bullish run and further demand to 0.86747 (April 7, 2013 high) resistance is expected.
However we have a Pin bar formation on the daily charts on the close of Friday’s trading session. This might favor the bears to sell of a little in the short term. I will regard this short term selling as a retracement in the current bullish trend. A break of 0.84382 support will confirm that medium term picture would be on the downside and further supply to 0.82800 psychological zones could be seen.
Key Economic indicators to watch out for in the coming week are the NZD GDP q/q which is scheduled to be published on March 19, 2014 and also U.S Economic Projections/FOMC press conference.