NZD/USD Edges Higher, RBNZ On Wednesday

The NZD/USD finished the day up 0.46% at 0.6145 and marked the fourth straight day of gains for the currency. Focus this week will be on RBNZ interest rate decision on Wednesday, where they are widely expected to keep rates on hold, the market is now pricing in an 85% chance of a cut in November.

• The BBDXY fell for the fourth straight session on Friday, down 0.18%. The currency whipsawed on the back off US employment data which showed a small beat for NFP growth, but heavy 111k downward revisions to the two previous months.
• The NZD/USD finished at session best levels, after the USD sold off into the close. The pair continues to hold above all moving averages, the RSI has ticked back above 50 to 56, while the MACD is now showing positive bars indicating buyers look to be in control.
• The Kiwi may also benefit from delayed rate cut expectations, as the Fed is currently pricing in a 81% chance of a cut in September vs just a 31% chance of a cut from the RBNZ in October.
• Immediate support is seen at 0.6116 (20-day EMA) a break would open up a move to 0.6085 area (100/200-day EMA). Resistance is at 0.6170 (Jul 5 high), a break here would open a move to 0.6200 (round number/psychological) while above here the June highs at 0.6222 become the target.
• The NZ-US 2yr swap is 3.5bps higher at 31.5bps.
• Expiries: 0.6135 (NZD494.5m), upcoming notable strikes: 0.6150 (NZD765.9m July 11), 0.6300 (NZD448m July 9), 0.6125 (NZD400m July 11)
• Today, the calendar is empty, focus will turn to the RBNZ rate decision on Wednesday.