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NZD/USD Finds Support after the RBNZ Financial Stability Report

The RBNZ released its semi-annual financial stability report and followed up with a press conference.

In terms of when the major central banks will start tightening up monetary policy, the RBNZ is way ahead of the crowd. Today's report and press conference maintains this perception as Wheeler noted that raising interest rates can help cool off housing inflation. 

(nzdusd 1h chart)

The NZD/USD has been consolidating after a downswing, and the relatively hawkish tone reinforced the consolidation support as the pair rebounded just before tagging the 0.8603 low.

The bullish candle with the long tail, seen in the 1H chart, reflects the markets reaction to the RBNZ report and presser.

(nzdusd 4h chart)

This week's high of 0.8668 is now in sight. A break above 0.8670 suggests bullish continuation and opens up the 2014-high of 0.8780.

NZD/USD has been making new highs on the year so it is very conceivable that the pair has upside above 0.8780 especially with the hawkish RBNZ tone.