Home THE DAILY EDGE Forex Focus NZD/USD, Performance Charts as at 12:00p.m. Singapore time, 12/06//2014
NZD/USD, Performance Charts as at 12:00p.m. Singapore time, 12/06//2014 PDF
Written by IG Markets   
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NZD/USD to retest this year’s highs
This is the third time rates have been raised this year and the central bank still sees considerable momentum in the economy and said that future rate moves will depend on how data progresses. It seems some of the market was beginning to feel we might see a pause in rates after today, but comments seem to have changed market perception. The market is quite hawkish when it comes to NZ rates, currently pricing in an additional 60 basis points worth of hikes this year and the three-month bills are forecasting rates to be 4%.

Today’s rate announcement put the NZD back in play and the currency has been by far the best performing currency in Asia today. NZD/USD printed a high of 0.8648 and momentum remains firmly to the upside. The pair traded at a high of 0.8780 in May only to pull back and trade at 0.8400 earlier this month. The recovery has been quite rapid and the pair has already knocked out some key barriers.

There is a slight barrier at the 23.6% retracement of the February low to May high move. This shouldn’t present too much of a challenge and I expect to see the pair close above this retracement line. I feel any moves back into 0.8600 could be used as a buying opportunity in the near term. Traders could eye a potential retest of the May highs. The pair is still quite far off overbought territory as well which helps solidify the potential for further gains case.