Risk Sentiment Stays Supported, RBNZ Less Dovish than Expected

Equities Continue to Rise on US-China Optimism

The dollar pulled back yesterday, underperforming against all but two of the other G10 currencies. The main winner was NZD, gaining after the RBNZ decision (see below), with NOK and AUD taking the second and third place respectively. The currencies which failed to capitalize against the greenback were the safe-havens JPY and CHF, with USD/JPY and USD/CHF trading virtually unchanged.

Nasdaq 100 — Technical Outlook

Looking at the 4-hour chart of Nasdaq 100 cash index, we can see that it continues to climb higher, breaking now above its key resistance zone at 7030. For now, it seems that the bulls could continue dictating the rules and the price may push further to the upside. We will remain positive, at least for the short run.

Kiwi Surges as RBNZ Appears Less Dovish than Expected

The Kiwi was the main winner among the G10 currencies, surging after the RBNZ announced its interest rate decision. The Bank maintained interest rates unchanged at +1.75%, while in the accompanying statement, Governor Orr reiterated that they expect rates to stay at this level through 2019 and 2020. He also brought back into the statement the part saying that the direction of the next move could be up or down.

GBP/NZD — Technical Outlook

During the Asian morning today, we saw increased buying activity in the New Zealand dollar, which led GBP/NZD to decline sharply, breaking through some key support areas, which now could become good resistance levels. There is a possibility to see the pair traveling a bit lower again, but before it may do that, GBP/NZD could retrace back up, in order to let other bears, who missed the initial slide, jump in and ride the pair.

As for Today’s Events

Today, the central bank torch will be passed to the Riksbank. At its latest policy meeting, the world’s oldest central bank decided to raise rates to -0.25% from -0.50%, which is the first increase since 2011, while in the accompanying statement, officials noted that the next hike is likely to come during the second half of 2019.

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