NZDUSD edges higher on hawkish RBNZ

NZDUSD bulls are trying hard to stay above the key resistance turned support level at 0.61400.

NZD has outperformed all its major peers during the past 30 days, rising more than ~3.81% to the US dollar.
 

The main support for the currency came from the Reserve Bank of New Zealand's (RBNZ) decision last week to leave the key interest rate intact at 5.5% - the highest level in 15 years.

The Governor of the RBNZ also stated that the bank could tighten policy if needed to keep inflation expectations in check.

RBNZ Deputy Governor Hawkesby has also stated that rate cuts are not part of the near-term discussion.

Investors are now preparing for this Friday's PCE inflation reading from the US.

The US PCE reading is the Federal Reserve's preferred way of measuring inflation.

A higher-than-expected reading may contribute towards higher-for-longer rates and potentially result in a stronger USD, while a lower-than-expected reading may bring rate cuts closer and potentially push the USD lower.

From a technical perspective ...

The NZDUSD is trading above important simple moving averages (21-, 50-, and 100-period SMAs), indicating a strong upward trend.
 

However, the Relative Strength Index is above its upper border (>70 - overbought, <30 - oversold), signaling the potential for a correction.

On the downside, the 0.61400 level provides immediate support, while on the upside, the 0.61696 level is the key resistance/target level for the NZD bulls.

According to Bloomberg’s FX model, NZDUSD (with 73.5% probability) is expected to trade within 0.6090 – 0.6228 range.