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Forex: NZD/USD loses grip on 0.8500 level

FXstreet.com (Barcelona) - The NZD/USD has been in retreat Thursday, falling a plunge yesterday that erased much of April’s gains. With a fresh weakness below the 0.8500 level during European trading, the pair is now settling in negative territory at 0.8471/77 at the time of writing.

At this juncture the cross has fallen -0.27% off its opening Thursday. According to the Mataf.net technical analyst team, the NZD/USD will encounter its next short-term supports at 0.8456, followed by 0.8418, and 0.8354. Conversely, the pair is slated to face resistance at 0.8558, then 0.8662, and ultimately 0.8666.

Looking beyond commodities, booming NZ house prices have already triggered hawkish rhetoric, culminating in a shift towards a slight tightening bias at last week's RBNZ policy meeting. According to Research Analyst Gareth Berry at UBS, “A watchful eye is also being kept on the accelerating post-earthquake reconstruction effort, given its potential to boost inflationary pressures more generally.”

Overnight, the ANZ Commodity Price Index in NZ surprised the market, reporting a figure of +12.6%, against expectations of just +7.4%.

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