The RBA will decide on interest rates next week and another rate hike from its antipode cousin should provide support for the New Zealand Dollar. However, a rate hold may could be the catalyst that brings an end to both commodity dollars bullish run. New Zealand fundamental data continues to point toward continued growth with building approval jumping 5.9% in February. However, a drop in business confidence, albeit from a ten year high, could be a sign that weakness is ahead. A dimming outlook for will push out the horizon for a RBNZ rate hike removing a supporting force for the “Kiwi”. Technically the NZD/USD has been trading in a triangle pattern between the converging 100 and 200-Day SMA’s at 0.7131 and 0.7030 respectively. A break of either level could lead to an extended move. A bullish thrust can’t be ruled out as a strong U.S. labor report could spark a bout of risk appetite which may generate support for the high yielder.-JR
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