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NZD Surges on Hawkish RBNZ, Dollar and Yen Pressured

New Zealand Dollar surges sharply today, on surprisingly hawkish RBNZ which started to signal a rate hike. Strength in the Kiwi is somewhat lifting Australian Dollar, and to a lesser extent Canadian. On the other hand, Dollar and Yen are both turning weaker, followed by Euro and then Swiss Franc. A focus for today is whether commodity currencies would overtake Euro’s place in the buying against Dollar and Yen.

Technically, EUR/AUD is worth a watch today. Break of 1.5680 support will be the first sign that corrective pattern from 1.5250 has completed. We might then seen the cross accelerates down to 1.5418 support next. At the same time, AUD/USD could follow by rising towards 0.7890 resistance. Break will target a test on 0.8006 high. Such developments, if happen, will suggest that comeback of Aussie, as inspired by the rally in Kiwi.

In Asia, at the time of writing, Nikkei is up 0.30%. Hong Kong HSI is up 0.71%. China Shanghai SSE is up 0.29%. Singapore Strait Times is up 0.72%. Japan 10-year JGB yield is down -0.0018 at 0.073. Overnight, DOW dropped -0.24%. S&P 500 dropped -0.21%. NASDAQ dropped -0.03%. 10-year yield dropped -0.044 to 1.564.

NZD/USD and NZD/JPY upside breakout as RBNZ signals Sep 2022 rate hike

New Zealand Dollar surges sharply after RBNZ kept monetary policy unchanged, but signaled that a rate hike could occur as soon as in September 2022. Governor Adrian Orr also said he felt comfortable using OCR projection as guidance. Though, the projections are “very highly conditional”, and will only be realized if economy pans out as expected.

NZD/USD break through 0.7304 resistance today and resumes the rally from 0.6942. Notable support was seen from 55 day EMA which affirms near term bullishness. Further rise is now expected as long as 0.7153 support holds. Retest of 0.7463 high should be seen next. Break there will resume larger up trend from 0.5467.

NZD/JPY breaks through 79.40 resistance as up trend form 59.49 resumes. Near term outlook will now remain bullish as long as 77.91 support holds. Next target is 61.8% projection of 68.86 to 79.19 from 75.61 at 81.99.