NZD/USD And AUD/NZD Analysis – February 16, 2018
FxPro Financial Services Ltd | Feb 16, 2018 06:37AM ET
The New Zealand dollar has continued to strengthen after the Reserve Bank of New Zealand’s (RBNZ) latest survey of inflation expectations was released on Wednesday. The survey revealed a steady climb in the number of businesses expecting inflation to rise over the coming years. The RBNZ will only raise interest rates after inflation has made a sustainable return to the higher end of its 1% to 3% target band. The unemployment rate is also expected to fall progressively in the years ahead, suggesting a change in RBNZ’s monetary policy is likely.
NZD/USD
The continued decline in the U.S. dollar has helped the Kiwi climb for five straight days to highs at 0.7436. In the daily time frame, a break of 0.7436 would challenge resistance at 0.7547 before making progress towards June highs in the 0.7520-50 zone. However, any reversal will find initial support at 0.7400 followed by 0.7350.
AUD/NZD
The AUD/NZD pair has broken a possible head and shoulders pattern with a measured target, which coincides with the June lows at 1.038. The breakdown was confirmed at the 1.085 neckline before the pair continued the decline to support at the 61.8% Fibonacci retracement level of 1.0724. Continued bearish momentum will find major support at 1.064, followed by 1.055. Only a reversal and move above the neckline at 1.085 would negate the bearish view, with initial resistance at 1.089.
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