It’s been an active day of trading for the NZ dollar on the back of the recent dovish comments from the Governor of the Reserve Bank of New Zealand Graeme Wheeler. The outlook for further rate hikes seems diminishing rapidly with expectations now that we won’t see any rate hikes until 2019, which will have a big impact on the currency as it’s always been a favourite for fixed interest rate traders.  With the cash rate already sitting at a record low at 1.75% the market has been a little bearish on the NZD for some time, but with inflation now forecast to struggle and the NZ economy being a little sluggish, it makes sense to hold for the time being.  Australasian countries in general have a policy of waiting and reading the data long before pulling the trigger on interest rates.

Sliding down the charts has been something of a trend for the NZDUSD as the bears have taken a strong holding recently. This has been somewhat further exacerbated by the RBNZ comments yesterday and weaker manufacturing data today, but what is key now is the next major level that markets will be targeting. For me the 68 cent floor of support will be a key one that the NZDUSD is likely to look to flirt with as these round number levels have a very strong psychological following. Any pull backs higher by the bulls should be very weary of the possible trend line that is forming and the 50 day moving average which has found some respect recently. Key resistance levels the bears will be looking to swipe at can be found at 0.6887 and 0.6945 and with the recent fundamental data I would expect sellers to be waiting in the shadows whenever there is a chance.

Gold has recently found some buyers in the marketplace after a number of heavy losses over the previous week as people jumped out the safe haven into riskier assets. While expectations are heavy that we will see further losses it would seem that there is a pause as the market takes notice of events unfolding. It would be quite easy to point them at the US political situation which does look unstable, but it also may be a case of the market taking a breather and unwinding some short positions.

Traders looking to take advantage are currently holed up at resistance at 1227 and this looks set to be the line in the sand to beat in the coming days if we are to see any bullish momentum. On the flip side if the bears are going to come back into the market and drive gold prices lower than a dip to support at 1197 is very much on the cards. Traders should also be aware of the 100 day moving average as it does get a lot of respect from technical traders at present.