NZD/USD recovery capped below 0.6550

NZD/USD recovery capped below 0.6550
FXStreet (Mumbai) – The New Zealand dollar remains boosted versus the American dollar in mid-European session, keeping NZD/USD near the mid-point of 0.65 handle. The Kiwi halted its recovery and wavers above 0.6500 awaiting fresh cues from US economic news due later in the session.

NZD/USD clings to gains

Currently, the NZD/USD pair trades higher by 0.42% at 0.6540, retracing from fresh session highs of 0.6546. The Kiwi recovered on Friday, consolidating on the upside following two days of sharp losses that dragged the NZD/USD as low as to 0.6499, its lowest since August 2009.

The Kiwi slumped to fresh six-year lows on Thursday on prospects that the Reserve Bank of New Zealand (RBNZ) will most likely cut interest rates at its meeting next week following softer inflation figures and Wednesday falling Fonterra’s dairy auction prices.

Analysts at BNZ note, “We see the bank taking the OCR from 3.25% today, to 2.50% by the October meeting,” “We anticipate the RBNZ will deliver both the July and September rate cuts with a prominent easing bias, which will keep NZ rates depressed.”

Meanwhile, markets turn their focus towards key US CPI figures due for release later today amid a rather quiet European calendar.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6571 (July 16 High) levels and above which it could extend gains to 0.6600. To the downside immediate support might be located at 0.6519 (Today’s Low) below that at 0.6499 (July 16 Low) levels.
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Source: FXStreet