- NZD/USD pulls back from a weekly high of $0.6092
- PM Jacinda Arden to lift the nationwide lockdown on 27th
- RBNZ mulls over more monetary stimulus
The NZD/USD currency pair pulled back from its weekly high of $0.6092 despite New Zealand PM, Jacinda Arden’s plans to lift the nationwide lockdown from April 27. The exchange pair is expected to show bearish behavior as the RBNZ approves a dovish monetary policy forward guidance.
RBNZ anticipates more monetary stimulus
On early Wednesday the pair gained 0.1% to 0.5965 and bulls are expecting the upward trend to continue above the psychological level of $0.60. The exchange rate is likely to test new monthly lows of $0.5843 as the central bank governor Adrian Orr indicates that there is a possibility of a negative interest rate policy. The governor has indicated that in the next meeting expected on May 13, they will consider another monetary stimulus as the global economic growth continues to weaken.
The central bank will continue using its balance sheet with members agreeing to offer forward guidance that the official cash rate will remain at 0.25% for the next year.
The addition of more monetary stimulus could present some headwinds for the New Zealand Dollar with the NZD/USD appearing to head for a monthly low at $0.5843 after a failed attempt to jump to the support levels around $0.6170 to $0.6230.
There is a positive sentiment on the pair after indications of an upward trend although the gains are yet to show any significant traction. Therefore the gains experienced could receive resistance around $0.6035 and $0.6040 levels which should clear the path for more gains if they see clearly. In contrast, the NZD/USD has pegged support at $0.5960 below which the currency pair will suddenly drop to $0.5920 area on its way to the 0.5900 level.
Time : 22-04-2020
Pivot : 0.5964
Technical View : Long position above 0.5984.
Target : 0.6004.
Technical View : Short position below 0.5944.
Target : 0.5924.
Comments :There is bullish sentiment on the pair and it is expected to test the $0.60 levels
Last Price : 0.5997