In Asia, the focus today will be on the Reserve Bank of New Zealand, which meets tonight at 20:00 GMT. The RBNZ is expected to proceed on, no change to the current 1.75% policy setting. They held rates steady at 1.75% in September, matching expectations. Back then, the statement by Acting Governor Spencer was consistent with no change in rates for an extended period, by saying “Monetary Policy will remain accommodative for a considerable period.”A dovish bias was retained, as the Acting Governor concluded that “Numerous uncertainties remain, and policy may need to adjust accordingly.” This was the same as in August, June and May. Meanwhile, Economic data has also been consistent with steady policy, and hence no changes in rates are widely expected until Q4 of 2018, when a 25 basis point boost is tentatively anticipated.
If the above statement, released as widely expected, the this should not has significant influence on New Zealand Dollar, which consider being strong against EUR and USD the last 2 weeks. Hence this is likely to continue for a while. Both EURNZD and NZDUSD seen in a Falling Wedge and a Rising Wedge respectively,since the last week of October. However significant is the fact that as seen in 4-hour chart, the EURNZD held yesterday for a 2nd day the support level at 61.8 Fibonacci level, which is at 1.6680. Today despite the rise seen yesterday, it is currently trading lower again, and towards 61.8 Fibonacci level.
A break below the 1.6680, but more importantly below the 200-period SMA , at 1.6650, would confirm the continuation of the downside, to target the 50-DAY MA at 1.6580. This possible movement is against the Falling wedge identifies earlier, however it agrees with intra day and Daily Stochastic, which is close to the oversold territory.
Moreover, with the pair moving between 50.0 and 61.8 Fibonacci level, only a move above the 1.6810, which is a confluence the 50.0 Fibonacci level and 20-Day MA , could suggest an easing of the downwards momentum. Resistance is expected at 1.6880-1.6900.
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