FxWirePro: NZD/USD hits three-week high, scope for further upside

• NZD/USD     hit three-week high on Friday as markets wagered policy tightening in New Zealand.

• The Reserve Bank of New Zealand lifted interest rates for the first time in over three years on Wednesday to ward off inflation risks, adding that further rate increases were likely for upcoming meetings..

•  Reserve Bank Governor Anna Breman defended the decision to raise the Official Cash Rate despite the weak economy, emphasizing that containing inflation remains the central bank's top priority.

• Governor Anna Breman told local media on Thursday that the latest flare-up of tensions in the Middle East reinforced concerns that inflation could become embedded.

•The hawkish comments partly explained why markets are wagering on a 73% chance the RBNZ could deliver a follow-up hike in September, with about 48 basis points of total tightening priced in by the year end.

•  Immediate resistance is located at 0.5817(50%fib), any close above will push the pair towards 0.5851(Higher BB).

•  Support is seen at 0.5748(Daily low)and break below could take the pair towards 0.5719(38.2%fib).

 Recommendation: Good to buy around 0.5760 with stop loss of 0.5700  and target price of 0.5850