NZD/USD finds support above 0.7200, back to the 0.7250 area
- Kiwi among top performers of the week amid a hawkish RBNZ.
- NZD/USD remains capped by 0.7300, supported above the 20-day moving average.
The NZD/USD bottomed at 0.7212 on Friday amid a rally of the US dollar, and then it rebounded, rising back to the 0.7255 area. It is hovering around 0.7250, holding onto weekly gains supported by the Reserve Bank of New Zealand (RBNZ) meeting.
On a volatile Friday, the US dollar pulled back during the American session and trimmed losses, favoring the rebound in NZD/USD. The DXY hit weekly highs near 90.50 and tend dropped back toward 90.00 following US economic reports.
The kiwi finished mostly higher across the board after the RBNZ offered a hawkish surprise in their statement, suggesting they plan to raise interest rates as early as the second semester of 2022. The key event next week, will be the US employment report on Friday.
Analysts at ING think the next step by the RBNZ will be to signal QE tapering and that the new hawkish bias is set to provide extended support to the New Zealand dollar. “A general risk-positive environment may allow NZD/USD to move above 0.7300 next week.”
During the week, the NZD/USD failed again to hold above the 0.7300 critical barrier and pulled back. The bias points to the upside while above 0.7120.
Technical levels