NZD/USD Forex Technical Analysis – Traders Shifted RBNZ Rate Hike Target from 5.0% to 5.31%

The New Zealand Dollar is inching higher on Friday in a relatively slow trade. The small gain brings the Kiwi to nearly unchanged for the week. Nonetheless, the currency is being supported by uncertainty over how high domestic rates might rise, driving bond yields to a one-month high.

At 09:54 GMT, the NZD/USD is trading .6329, up 0.0003 or +0.04%.

RBNZ May Go Super-Sized

Reuters is reporting that investors have also priced in more chance that the Reserve Bank of New Zealand (RBNZ) will raise rates by a super-sized 75 basis points at its meeting on Feb. 22.

The expected New Zealand central bank rate peak has also shifted up to 5.31%, from closer to 5%, a week ago.

New Zealand Manufacturing Index Improves, Credit Card Sales Jump

The manufacturing sector in New Zealand moved back into expansion territory in January, the latest survey from BusinessNZ revealed on Friday with a Performance of Manufacturing Index score of 50.8.

Meanwhile, electronic card retail spending in New Zealand was up a seasonally adjusted 2.6 percent on month in January, Statistics New Zealand said on Friday – following the 2.3 percent decline in December.

Daily NZD/USD Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .6270 will change the main trend to down. A move through .6538 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through .6389 will change the minor trend to up.

The minor range is .6270 to .6389. The NZD/USD is straddling its pivot at .6330.

The nearest resistance is a short-term 50% level at .6365. The closest support is a long-term Fibonacci level at .6231.

Daily NZD/USD Technical Forecast

Trader reaction to the minor pivot at .6330 is likely to determine the direction of the NZD/USD on Friday.

Bearish Scenario

A sustained move under .6329 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main bottom at .6270.

Bullish Scenario

A sustained move over .6329 will signal the presence of buyers. This could lead to a labored rally into the 50% level at .6365, followed by the minor top at .6389 and the short-term retracement zone at .6404 – .6467.