Global macro overview for 11/05/2017:
The Reserve Bank of New Zealand decided to hold the interest rate at the level of 1.75% as expected. In the statement, the RBNZ said, that "the growth outlook remains positive, supported by on-going accommodative monetary policy, strong population growth, and high levels of household spending and construction activity". Nevertheless, the inflation still remains above the RBNZ target (inflation climbed to 2.2% in the first quarter, much higher than the central bank's projection of 1.5%). Amid a steady pace of the economic growth, many analysts see an interest rate hike in New Zealand's medium-term outlook.
Let's now take a look at the NZD/USD technical picture on the H4 timeframe. The lack of reaction to positive changes in the macroeconomic environment has brought a notable correction of the recent strength of the NZD, the strongest currency G-10 in May until yesterday evening. The market fell towards 0.6800 and breached the key support zone at the level of 0.6838 with a low at the level of 0.6818.Currently, the price is testing the level of 0.6847, but the market is still looking weak at the moment. The next support is seen at the level of 0.6674.
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