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The RBNZ is up this week! Will the central bank event extend the Kiwi’s gains across the board?

Or will it inspire some major profit-taking?

Take a look at the catalysts that might affect Kiwi’s prices in the next few days!

RBNZ’s policy announcement (Sept 23, 2:00 am GMT)

  • The Reserve Bank of New Zealand (RBNZ) isn’t expected to make any major policy changes ahead of the general election on October 17
  • Finance Minister Robertson recently repeated the RBNZ’s commitment to maintaining its rates at 0.25% until March 2021
  • Watch out for a dovish tone, which could set off speculations of larger asset purchases in the foreseeable future
  • RBNZ will be renaming its event from “OCR” announcements to “Monetary Policy Review (MPR)” announcements to reflect the inclusion of tools such as asset purchases and forward guidance in fulfilling its mandate

Trade balance (Sept 23, 10:45 pm GMT)

  • NZ’s surplus narrowed down from 474.78M NZD to 282M NZD in July as imports fell more sharply than exports
  • NZD didn’t react much to the news though the positive report helped boost the comdoll when risk appetite gripped the markets in mid-Asian session trading
  • Analysts see the trade surplus narrowing further to 100M NZD in August, with exports estimated at 4.5B (from 4.91B) and imports seen at 4.6B (from 4.63B)

Market risk sentiment

  • Rising coronavirus cases around the globe will provide a strong contrast against New Zealand recording relatively minimal cases and likely cushion NZD from anti-risk trades
  • PMI reports from major economies will paint a picture of the pace of economic recovery, which could influence overall market risk appetite

Technical snapshot

  • Stochastic considers the Kiwi “overbought” against all of its major counterparts except for the yen and the franc
  • NZD/CHF may soon hit overbought status, however
NZD Forex Pairs Stochastic from MarketMilk
NZD Forex Pairs Stochastic from MarketMilk
  • EMAs reflect NZD’s short and long-term bullish trends against most of its major counterparts
  • NZD/AUD remains under the 200 EMA resistance on the daily time frame
NZD Forex Pairs EMAs from MarketMilk
NZD Forex Pairs EMAs from MarketMilk
  • Kiwi saw the most volatility against GBP, USD, JPY, and EUR in the last seven days
NZD Forex Pairs Volatility from MarketMilk
NZD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read NZD’s price recap for September 14 – 18!