Kiwi rises on comments from RBNZ chief but recovery is seen limited
The Kiwi dollar jumped from new over 3 ½ year low (0.6361) in early Friday’s trading, following better than expected New Zealand Q2 retail sales and comments of RBNZ Governor, who said that the central bank can wait on monetary policy decision after last month’s 0.5% cut.
Kiwi was relieved by comments that cooled down expectations the central bank would maintain aggressive approach to the monetary policy, however, recovery action is seen limited on expectations that Fed Chairman Powell, in his speech later today in Jackson Hole symposium, would signal that the US central bank has not entered extended policy easing cycle.
Overall bearish daily techs show some signals of correction on oversold stochastic and rising momentum (still deeply in the negative territory).
Falling 10DMA (0.6417) marks solid resistance ahead of falling 20DMA (0.6474), which is expected to cap and offers better opportunities for re-entering bearish market.
Break below new low at 0.6361 would open way towards Jan 2016 low at 0.6345.
Only firm break above 20DMA would but larger bears on hold for stronger correction, which will need confirmation on extension above 0.6525 (Fibo 38.2% of 0.6790/0.6361 fall).
Res: 0.6395; 0.6417; 0.6462; 0.6474
Sup: 0.6361; 0.6345; 0.6300 0.6240