NZD/USD rises further above 0.7200 as USD retreats

The kiwi continued to rise against the US dollar during the American session. NZD/USD is trading at 0.7236, at daily highs, higher for the day. 

The pair gained momentum amid a decline of the US dollar across the board. The Dollar Index peaked earlier today at 93.45, the highest in a month and then dropped below 93.00. 

NZD/USD bounces from key support 

Yesterday the pair lost strength after comments from Fed’s officials and following the presentation of Trump’s tax reform. It dropped further after the Reserve Bank of New Zealand meeting. The central bank kept rates unchanged, as expected at 1.75% and signaled that monetary policy will remain accommodative for a considerable time.

“We agree that there is little reason to consider changing the stance of policy for the moment and expect the RBNZ to be on hold for some time yet. However, do expect that the next move will be up. We are forecasting growth to pick up from 2.8% in 2017 to 3.3% in 2018”, said analysts at HSBC. 

RBNZ to stay on hold for some time - HSBC

During the Asian session, NZD/USD fell to test the 0.7165 area. The kiwi held on top and turned to the upside. Since then it has been rising constantly and the moment near the end of the session is testing the 0.7235/40 area. 

The pair is attempting to move off September lows. It still faces some bearish pressure. If it manages to rise above 0.7330 it could gain support for a more sustainable rally. 

Technical levels 

To the upside, resistance levels could be seen at 0.7240 (Sep 27 high), 0.7275 (Sep 22 low) and 0.7295 (Sep 21 low). On the flip side, support might be located at 0.7215 (Sep 12 & 13 low) and 0.7165 (Sep 26 & 28 low).