RBNZ Meeting: Cut or Hold ?. Does channel keep Kiwi in range ?

FX:NZDUSD   New Zealand Dollar / U.S. Dollar
268 3 4
Tomorrow, risk event is RBNZ Meeting where we have a rate decision and monetary policy statement.

Let me remind you that we are in A CURRENCY WAR.

Last week, we saw BOC             unexpectedly cut rate while all economists as well as traders thought that they will hold rate.

Hence, economists around the world claim that the upcoming RBNZ meeting would follow BOC             decision : Cut rate to pay back in the currency war; moreover, RBNZ still have more room to cut rate than BOC             : 3.25%

RBNZ have many reasons to cut rate tomorrow; one of those is the ongoing falling of dairy price auction; they need to protect main export product.

However, differ from Canada, macroeconomy of New Zealand performs very well since last meeting; while there is a housing bubble in Aukland : RBNZ could rethink about those problems before making a rate cut decision.

IF I WERE THEM, I WOULD CONTINUE TO EASING : CUT RATE. Acutually, I were not them, so I don't know what they will do.

After discussing with my partner, despite my view point is bearish , I am forced to accept the majority: RBNZ would not cut rate and the final view is : BULLISH : LONG VIEW

- Technical Analysis .

NZDUSD             price action since April 28 respects a bearish channel I draw on the chart.

The question on the table is: Does channel keep Kiwi in range or break it ?.

Any break will trigger for a strong profit taking and pullback.

I see RSI indicator: the index broke the trend line draw on the char and escape the oversod zone : More strengh incoming.

If I choose the Bullish view:

- First target: 0.6790
- Second target: 0.6900

I think NZDUSD             will test those target in the near term.

In the long term, those resistance could send a SELL opportunity for SELLER in the context USDollar             is still very strong.


If RNBZ cut rate, and send a strong dovish comment in the statement: I am wrong in this article.

They could cut rate but don't signal for any further cut : This also triggers the profit taking and rally .

In my opinion they will cut rate then hold it till September. Thus it'll be a perfect opportunity to open long positions when the dust settles, possibly @0.64. A large correction is looming.
With NZ farmers revenues sliding and over indebted the only for them to refinance farming industry is lowering rate. So a short from the high to the bottom channel is expected ( according me ;-)). Anyway G Wheeler is a former cricket player, so.....
Sforex AndrewHook
Like I said, I choose SHORT, but majority in our team chooses LONG.

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