- RBNZ Deputy Governor Grant Spencer noted yesterday that further rate cuts could pose a risk to financial stability.
- RBNZ said it concerned about a severe housing correction that would pose real risks to the financial system and broader economy.
- Kiwi closed yesterday at 0.7227 against the greenback, is extending overnight gains in early Asian session today.
- Next hurdle on the upside is located at 0.7298 (2016 high), above which prices could target 0.7322 (week ended May 25 2015 high).
- On the daily charts the pair has failed to breach below 0.7075 which was strong trendline support.
- Technical indicators support further upside in the pair. We see scope for test of 0.73 and then 0.7322 (week ended May 25 2015 high).
- Weakness only below 0.7125 (trendline support), break of which could see resumption of downside upto 0.6970 levels.
Recommendation: Buy dips around 0.7250, SL: 0.72, TP: 0.73/ 0.7325
