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 , I am forced to accept the majority: RBNZ would not cut rate and the final view is : : LONG VIEW
NZDUSD price action since April 28 respects a 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 indicator: the index broke the draw on the char and escape the oversod zone : More strengh incoming.
If I choose the 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 .