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Potential move higher from the EURO over the NZD?

Written by Sam Coxhead on July 21st, 2011.      0 comments

1:30 PM (NZT) Just a quick update on the status of the NZD/EUR pair.
The demand for the NZD remains in place as the interest rate market now has moved to fully price in a October hike of 25pts in the cash rate from the RBNZ.
Next Thursday is the next RBNZ cash rate review, and whilst very unlikely that they will move then, they have an opportunity to communicate to the market their intentions for the coming months. Certainly on the face of the recent data and earlier than previously expected cash rate hike is on the cards.
An hour or so ago the EUR got a bit of a boost when German and French officials declared they had come up with a joint position on the extension of bailout funding for Greece. This comes a day before the EU meeting to discuss a proposal going forward and this is a positive for the EUR. If things continue to progress tomorrow we should see a little follow through from the EURO against the NZD.
If we can see the resistance hold at the levels around the recent high of .6061 the chances of a corrective move to lower levels remains on the cards. .5920 provides the first support level which was significant resistance on the move higher