NZDUSD adds 0.16% higher at 0.6407 after the New Zealand Producer Price Index – Input (quarter over quarter) came in at 0.9% beating expectations of 0.5% in 3Q, the Producer Price Index – Output (quarter over quarter) came in at 1% also above forecasts of 0.3% in 3Q.
NZD run an impressive rebound after the Reserve Bank of New Zealand kept interest rates unchanged surprising analysts that expected a rate cut by 25 bps. I expect that RBNZ will proceed with the rate cut in the first quarter of 2020, while if the global growth continues to deteriorate, I will not be surprised by an additional cut to 0.5% latter in 2020.
NZDUSD has a high correlation with headlines surrounding the US-China trade talks when positive news coming out NZD rising while when the news is negative NZDUSD turns to loses.
NZDUSD Technical Outlook
NZDUSD reverses Asian session losses and climbed above the 0.64 mark as risk appetite returns to forex markets. Looking north the pair will find resistance at the daily top at 0.6410 while bulls need to clear the 100-day moving average at 0.6434 in order to regain the control of the pair. In that case next target to the upside is the 0.6465 high from November 4th.
On the flip side, support for the pair stands at 0.6381 today’s low, while extra support stands at 0.6343 the 100-day moving average. The outlook of the pair is neutral as the pair trapped between the 50 and 100-day moving average.
As we don’t expect and market-moving news from New Zealand this week, the headlines from trade negotiations will drive the pair while only a break above the 100-day moving average might initiate another technical leg higher.