NZD/USD keeps just above 0.7300 for now but isn’t running away with it
The kiwi is the best performing major currency so far today after the RBNZ was more hawkish than expected, with forecasts projecting a rate hike in 2H 2022.
That has seen the kiwi shoot higher earlier today and buyers have kept gains above 0.7300 for the time being, looking to hold above the 10 May high @ 0.7305.
From a technical perspective, there is clarity in the sense that if price can hold a break above 0.7300 then there is room for gains to extend towards the February highs @ 0.7455-65 next or at least contest the 0.7400 handle first.
Looking back at the RBNZ event earlier, there is also some added good news which may have gone by unnoticed for kiwi buyers. That being the RBNZ not offering any major pushback on the currency’s strength even as it climbs to 0.73 during Orr’s presser.
I reckon that in itself says a lot about how willing the RBNZ is willing to defend a currency at this level. Considering their hawkish stance, they may very well have decided that they are only going to take a firmer stance at a higher threshold.
That sets a good backdrop for the kiwi to keep higher so long as the RBNZ doesn’t fall short of its hawkish positioning and joins the chorus of the BOC.