NZD/USD challenges 0.7000 handle as RBNZ looms

After an initial dip below 0.6950, the NZD/USD pair resumed its upside momentum and rose to 0.7000 handle ahead of the RBNZ monetary policy meeting on Thursday.

On Tuesday, the pair erased Monday's losses and posted a considerable gain. The pair extended its upward trajectory on Wednesday and has now risen to fresh 5-week high level, despite of being underpinned by the approaching RBNZ monetary policy announcement. 

The New-Zealand central bank is scheduled to announce the official cash rate and monetary policy statement with consensus estimates pointing to a 25bps rate cut, bringing down benchmark interest rates to 2.0% from current 2.25%.

After surprising the markets in March by lowering its benchmark interest rates, should the RBNZ surprise again by not cutting rates, the NZD/USD pair could continue soaring higher in the near-term.

Technical levels to watch

From current levels, the pair seems poised to challenge a double-top resistance near 0.7050 region, which if conquered should now open room for further near-term appreciating move for the pair. Above 0.7050 strong resistance, the pair could immediately jump to 0.7180 horizontal resistance before heading towards June 2015 highs resistance near 0.7230-35 zone.

Conversely, reversal from key resistance level and a subsequent drop below 0.6950-45 immediate support seems to drag the pair back below 0.6900 handle towards retesting 50-day SMA support near 0.6850 region.