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- NZD/USD may struggle to move higher with resistance at 0.6390 – Citi
NZD/USD may struggle to move higher with resistance at 0.6390 – Citi
Economists at Citi analyze the NZD/USD and AUD/NZD pairs after the Reserve Bank of New Zealand 50 bps hike suprise.
The technical picture could lend weight to a lower AUD/NZD
“Post the surprise 50 bps hike by RBNZ, markets are currently pricing in around +25 bps by the July RBNZ meet, which would bring OCR to the RBNZ guidance for terminal rate of 5.5% at the February MPS. However, we think NZD/USD may struggle to move higher with resistance at 0.6390 (February 2023 highs), unless we see a strong print at the April 20 Q1 CPI (local) which supports the case for a higher terminal rate.”
“The technical picture could lend weight to a lower AUD/NZD as we are on track to close below strong AUD/NZD support at 1.0617-1.0612 (76.4% Fibonacci, March 2022 low, October 2021 high). If we see a weekly close below this level, we would complete a bearish outside week (as a continuation), which suggests an extension of the move, lower towards 1.0471.”
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