The downward trend continues for the twelfth month. USD continues to receive support from both macroeconomic reports and the Fed's monetary policy. The geopolitical component also has to be taken into account, since the likelihood of a military conflict between Russia and Ukraine puts pressure on risky assets. In this scenario, the NZD's commodity currency status is a negative issue because New Zealand imports all of its oil, which is growing increasingly expensive.
The RBNZ monetary policy meeting is in the spotlight this week. Given the increase in inflation significantly above the central bank's targets, investors expect a significant increase in the rate. Therefore, the New Zealand dollar continues to receive support and is growing for the sixth trading day in a row, despite the negative external background.
On the chart, we observe a price correction that lasts for almost a month and is expected to go on until Wednesday, following the results of the RBNZ meeting. Also this week, with the publication of statistics on US GDP in the 4th quarter, the US Federal Reserve's monetary policy report, and individual expenses, volatility rises. In New Zealand, the trade balance is expected to be published. Most technical analysis tools indicate the effectiveness of the deals to BUY. Such deals will be effective throughout the day. At the same time, we believe that the price correction is close to completion, and then the rates may resume a downward movement. Therefore, the deals to SELL can be opened right after receiving the RBNZ decision on the rate for New Zealand.
