NZDCAD Breaks OutThe rally in NZD on the back of the February RBNZ meeting overnight has seen the NZDCAD breakout idea from .8553 hitting its first target at .8631. With the retail market heavily short the pair and with both MACD and RSI bullish here, the focus is on a continuation higher while 8553 holds, targeting a move up to the .8751 level next. The hawkish shift from the RBNZ, which hiked rates overnight and is signalling further hikes to come, has made the RBNZ among the most hawkish in the G10 bloc now, suggesting plenty of room for further NZD appreciation near term.Keep An Eye OnNZD appears to be shrugging off the broader risk aversion seen in response to the ongoing uncertainty around the Russia/Ukraine situation. Importantly, NZD looks to be benefiting most from stickiness in the Dollar. With that in mind, look for NZD to remain supported while USD remains subdued. Any upside reversal in USD this week, however, will likely limit the rally in NZD so keep an eye on USD flows going forward.
Source: Tickmill