28.09.201711:29 Forex Analysis & Reviews: Global macro overview for 28/09/2017

Global macro overview for 28/09/2017:

The Reserve Bank of New Zealand left its Official Cash Rate unchanged at 1.75% as widely anticipated. In the Monetary Policy Statement, RBNZ reiterated, that monetary policy will remain accommodative for a considerable period. The decision was the first one made by Acting Governor Grant Spencer, who will be in the job for six months till a permanent replacement is found for Graeme Wheeler (whose term ended this week).

The statement was almost identical with the previous one, but it was widely expected by markets. There were some slight changes to the language around expectations on the NZD, with the statement this time around saying a lower valued dollar would "help", which was a change from the word "needed" used in the August statement. The other change is in RBNZ approach towards the economic projections, as they appear to be more cautious about growth prospects for the New Zealand economy, especially after the recent weakness in the construction sector.

In conclusion, the RBNZ become more cautious and neutral, as the monetary forecast has no rises in the OCR till late 2019 and there's nothing in the latest statement to suggest that view has changed.

Let's now take a look at the NZD/USD technical picture at the H4 time frame after the decision was made. The market did not manage to break out above the golden trend line and dipped again towards the technical support at the level of 0.7166. Currently, the price is recovering slowly from this level, but it is still under the golden trend line resistance. In a case of a breakout lower, the next support is seen at the level of 0.7131.