NZD: New Zealand’s finance minister delivered a speech in Wellington Employers’ Chamber of Commerce today. «We remain committed to further reductions in income tax rates or thresholds, when fiscal conditions permit,» Bill English said on Friday in a pre-budget speech. He stated the current low level of inflation, currently 0.1 per cent and well below the 2 per cent midpoint of the central bank’s target, was «mostly good for New Zealand households».
«But at the same time, very low inflation and lower commodity prices mean growth in the nominal economy, which is the dollar value of what we produce each year, is more muted than expected.»
Technical view: The kiwi pushed lower against the USD and EUR. At yesterday’s session, we advised buying EUR/NZD with targets at 1.4685, 1.4785, and in the medium term 1.4820,1.4860, and 1.4930. The cross made a high at 1.4797 and minted 200+ pips in a day. The cross has the nearest resistance at 1.4820 100Dema and 1.4865 20Dsma. We advised buying at 1.4570 in yesterday’s article. On the four-hour chart, RSI and stochastic signal overbought levels. Today, we guess the cross can pause its move next to 1.4800 and 1.4820. Intraday support is found at 1.4688 and 1.4630. The cross edged higher and probably made a double bottom at 1.4174 April 28 low and changed the direction. Currently, the cross is trading at a 7-week high and trading above the previous swing on the daily chart. The pair favors buyers in all time frames in the near and medium terms.
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