NZD/USD rebounds from 38.2% fib, jumps above 0.72 handle

NZD/USD found takers around 0.7179 (38.2% of 0.6862-0.7676) earlier today and jumped to a high of 0.7208 levels.

Risk-on action in the markets is certainly helping the commodity currencies this Monday morning. The uptick in the NZD/USD is a relief for the bulls, given the pair suffered sharp losses last week following RBNZ’s dovish interest rate forward guidance.

NZD/USD rather towards 0.70 - Natixis

Natixis strategy team believes the post-RBNZ sell-off could be extended to 0.71 handle. “At its monetary meeting, the RBNZ clearly weakened its currency by calling for a weaker New Zealand dollar due to its overvaluation. Despite rising inflation, it is planning to keep its key interest rates unchanged until 2019. The tone of its press release even reflects the possibility of a cut in the cash rate, which at 1.75% is still very high compared with the other G10 countries. In the short term, the NZD/USD should rapidly test the 0.71 level”, the Natixis report says.

NZD/USD Technical Levels

The spot was last seen trading around 0.7205 levels. A break below 0.7179 (38.2% fib) would expose 0.7139 (50-DMA) and 0.71 (zero figure). On the other hand, breach of 5-DMA of 0.7231 could yield a retracement to 0.7266 (10-DMA), above which the spot could revisit 0.73 (zero figure).