NZD/USD Eyeing Test Above 0.6100, RBNZ In Focus This Week

NZD/USD sits just below Friday session highs in early Monday dealing. We were last near 0.6075, (Friday highs around 0.6090). The NZD was the best performing G10 currency last week, up nearly 1.40%. Sentiment for the USD remained soft last week, despite a recovery in US yields on Friday.

• Risk appetite was better in the equity space, although gains towards the end of last week were modest. A measure of global equities rose 0.82% last week building on the prior week's +2.38% gain.
• Reduced threat of wider conflict in the Middle East, along with a sense the US may be done with its tightening cycle, have aided sentiment over this period, which has caped the USD and aided higher beta FX like NZD.
• For NZD bulls, we are now above the 200-day EMA (near 0.6060), while the 100-day sits back close to 0.5990. A break above 0.6100 could see 0.6165/70 targeted, levels we last saw in early August.
• The main focus this week will be Wednesday's RBNZ decision. No change is expected, something reinforced by the NZIER shadow board (see this BBG link). However, there will be focus on the updated RBNZ forecast projections.