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Sizeable Resistance Building

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Needle Still Points North

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Bullish Argument Down, But Not Out

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Attention Is On Resistance

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Stocks Higher as Stimulus Here to Stay

NZD Dips After RBNZ Decision

KIWI

The RBNZ monetary policy decision knocked the NZD on its head, as policymakers left the OCR unchanged, while expanding the LSAP programme to NZ$100bn and extending it until Jun 2022. Most analysts expected no change to the size of LSAP or a more modest uptick, but it the re-emergence of Covid-19 on the shores of New Zealand may have influenced the MPC's decision. The RBNZ said that it is actively preparing a range of monetary policy tools, including a negative OCR and foreign asset purchases.

  • NZD/USD sank through its 50-DMA to print a one-month low, but now trades off worst levels. With the rate sitting -26 pips at $0.6551, bears look for further losses past $0.6532-28, which limited losses on Jul 15-20, towards Jul 14 low of $0.6503, a key near-term support.
  • AUD/NZD trades +16 pips at NZ$1.0877 after pulling back from the reaction high, which was also the new YtD peak. Bulls look to take out the upper 3.0% Bollinger band at NZ$1.0962.
  • NZD/JPY trades -18 pips at Y69.87 as we type. Bears look for a dip through Jul 30 low of Y69.55 before targeting the 200-DMA at Y68.85.
MNI London Bureau | +44 203-865-3806 | krzysztof.kruk@marketnews.com