NZD/USD: closing bearish opening gap, eyes on RBNZ

Currently, NZD/USD is trading at 0.7411, up 0.05% on the day, having posted a daily high at 0.7417 and low at 0.7403.

Nonfarm payrolls: positives and negatives - Nomura

NZD/USD opened with a bearish gap that has since been filled and trades back on the 0.74 handle. This is the aftermath of last week's US session when the US dollar had its strongest close due to a solid nonfarm payrolls result. 

"There’s much to be impressed about with this jobs report and the Fed will breathe a sigh of relief on the earnings front," explained analysts at Westpac.

RBNZ: "it is equally likely that the next move in the OCR could be up or down."

Turning to the domestic calendar for New Zealand, all eyes are focused on the RBNZ this week, especially now that the RBNZ is now on record saying, "it is equally likely that the next move in the OCR could be up or down." However, despite the recent resurgence in the greenback, the analysts at Westpac argued that the RBNZ will almost certainly lambast the high exchange rate, possibly going so far as to say that if the exchange rate fails to fall, the outlook for monetary policy will need to be reassessed.

"The other key piece of data to watch out for, out later today, is the RBNZ’s survey of inflation expectations. This popped higher last quarter, but is expected to pull back this quarter. A surprise on inflation expectations in either direction could well influence the RBNZ’s MPS later in the week," explained the analysts.

NZD/USD levels

To the upside, 0.7420/25 ahead of the key 0.7440 and 0.7480 as the near-term resistance areas. 0.7520/25 double top highs are ahead of the 21st July high at 0.7557. In a continuation, 0.7744 were the April 2015 highs ahead of the opening highs for that year at 0.7889. 

To the downside, 0.7390/00, 0.7386, 0.7280, (11th July high), 0.7205/06 June 22/21 lows; 0.7186 June 15 low; 0.7150 June 5 high; 0.7127 June 6 low. On the wide, on a break below 0.7080/00 opens 0.6970.