NZD/USD surges to nearly one-month high ahead of Thursday's RBNZ decision

The NZD/USD pair continues to surge and has now touched its highest level since July 14 as focus now shifts to Thursday's key RBNZ monetary policy decision. 

Currently trading at 0.7260, up 1.30% for the day, the pair is benefiting from diminishing prospects of an eventual Fed rate-hike during 2016. 

However, heading into key event risk, RBNZ interest-rate decision, where markets already seem to have priced-in a 25 bps rate-cut, a surprising 50 bps rate cut or hints of further easing in coming months would trigger a sharp turn-around in the sentiment and could produce a knee-jerk bearish reaction for the Kiwi. 

How strong has the move been?

The hourly FXStreet OB/OS Index is showing overbought conditions, alongside the FXStreet Trend Index which is slightly bullish. RSI is neutral at 72.78, down from 76.47 at the last hour close, while ADX is trending at 48.61, up from 37.84 previous. Meanwhile, daily RSI is in neutral territory at 53.63.

On the hourly NZD/USD chart, the 200 SMA is declining and currently at 0.7162, down from the previous hour close at 0.7171. On average, the exponential closing price for the past 20 days is 0.7135, with the trend indicating a range-bound movement ahead.

Price levels to be considered

Next resistance can be seen at 0.7266 (Daily Classic R3), 0.7300 (Monthly High), 0.7307 (Annual High) and 0.7307 (YTD High). Next support to the downside can be found at 0.7227 (Weekly Classic R1), 0.7224 (Daily Classic R2), 0.7199 (Hourly 20 EMA), 0.7195 (Daily Classic R1) and 0.7182 (Yesterday's High).