Kiwi At Resistance Ahead of RBNZ Rate Decision
2023.05.23 06:39
Markets are slow and sideways even after EU PMI data which was mixed when comparing German and French numbers, but most important will be the US PMI later today at 15:45 CET. Technically nothing has changed, the are still consolidating within intraday recovery, now seen in wave four from where we expect a bounce but will need a catalyst which will have to wait longer it seems, as US President Joe Biden and House Speaker Kevin McCarthy failed to reach an agreement on raising the debt ceiling. However, I think that USD will be trading higher this week still and potentially cause more weakness on currencies that have bearish EW setups.
Looking at we can see it in a minor recovery ahead of RBNZ decision tomorrow when speculators expected another 25bp increase. However, last time they raised more than expected kiwi fell anyway, so I am afraid that there are not a lot of buyers this time, since I doubt there will be any new surprises. From an Elliott wave perspective, I see bearish price action, looking for further weakness after a sharp drop from 0.6380 followed now by only a-b-c rise. That’s a very strong technical bearish pattern that can cause a drop back to 0.6180 while the market trades below 0.638.
Grega
