Short-Term Forex Technical Outlook: NZD/USD

The New Zealand dollar slipped lower against the greenback this week as investors curbed their appetite for high-yielding assets, and the exchange rate is likely to fall lower over the following week as RBNZ Governor Alan Bollard is widely expected to lower the benchmark interest by another 50bp to a record-low of 2.50%.
Currency Pair: NZD/USD
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis

The New Zealand dollar slipped lower against the greenback this week as investors curbed their appetite for high-yielding assets, and the exchange rate is likely to fall lower over the following week as RBNZ Governor Alan Bollard is widely expected to lower the benchmark interest by another 50bp to a record-low of 2.50%. After reaching a high of 0.6349 in October, the NZD/USD slipped to a low of 0.4894 in March as market sentiment faltered, and the lack of momentum to break above 0.6030-40 (78.6% Fib) paired with expectations for lower borrowing costs are likely to push the pair towards the lower-end of its broad range over the following week as traders pull out of high risk/reward investments. Over the next few hours of trading, we may see the pair continue to test 0.5620-30 (50.0%) for short-term resistance, and the pair should cross back below the 120 SMA to retrace the advance from the previous session. Meanwhile, as the OECD calls for the RBNZ to lower the cash rate to 2.00%, commentary following the rate decision could also weigh on the exchange rate if Governor Bollard leaves the door open for lower rates, and we may see the NZD/USD attempt to retrace the rally from March over the near-term.