NZD/USD pares a portion of its overnight sharp gains The NZD/USD has been trading in the upper level overnight – apart from the past hour – mostly due to the risk-on sentiment. NZD/USD eyes 0.8400; is a solid break as of 0.8400 a matter of time? The NZD/USD touched 0.8400 in the wake of the Nikkei surge, as the immense gains of the Japanese index (inspired by Toyota gains as well as on a 2-week low of Shibor), increased risk appetite and the kiwi outperformed during Asia trading session. What’s more, the NZD/JPY was also boosted by the surging NZD/JPY as the sharp gains of the Nikkei induced the Japanese crosses sell off. Furthermore, markets are now ‘pricing in’ 87bps in RBNZ rate hikes over the coming 12 months (the most supportive outlook in nearly 2 months), thus the kiwi might get also a solid support by such an expectation. Technical Perspective on the NZD/USD The last couple of hours the kiwi is well capped by 0.8400, while having touched 0.8399 earlier. Technically speaking, on the upper level the cross might first have to overcome the barrier as of 0.8416 (17th October low), followed by the 0.8436 (22th October low). Downwards, the 0.8350 area is considered to be a crucial support.
Posted on: Wed, 06 Nov 2013 08:29:21 +0000
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