NZD/USD Breaks Above 0.6250, Yearly Highs In Sight

NZD/USD erased losses made on Monday to close up 0.77% at 0.6252 the highest level since January 15th. The USD steadily edged lower throughout Tuesday’s US session, mirroring the move seen in front-end US Tsys during the US session. The NZD has been the best performing G10 currency over the past week, now up 1.51%.

• The NZD/USD has now closed above 0.6248 the August 20 highs, signaling a breakout from the recent ranges, with the yearly highs of 0.6328 now in play. The pair is now trading in overbought territory with the 14-day RSI at 69, while the MACD indictor is now at its most positive for the year.
• Initial support is now 0.6200 with a break here potentially causing further weakness and a resumption of the yearly rangebound trading, if we do fall back below 0.6065-6075 (50, 100 & 200-Day EMA) will be the support zone. Initial resistance is 0.6285 (Jan 4 highs) above here 0.6285 (Jan 1 highs).
• RBNZ dated OIS is pricing is little changed this morning, October meeting has 33bps of cuts priced in, while the November meeting has softened 2bps to 74.5bps, while the February meeting is now pricing in 112bps of cuts.
• The NZ-US 2yr swap spread was 7bps higher on Tuesday and now trades at 11.50bps
• Expiries: 0.6000 ($800m) & 0.5800 ($800m) Aug 27th, 0.5775 ($300m) 0.586 ($270m) 0.5900 ($220m) Aug 28 NY cut
• Today, Filled Jobs at 08:45 AEST