• NZD/USD has pushed back above 0.6700 on Monday despite global equities falling on geopolitical tensions.
• The pair is eyeing a break above key resistance in the 0.6730s, which would open the door towards 0.6800.
• NZD bulls are in charge ahead of this week’s key RBNZ meeting, amid chatter about a 50 bps hike.

Despite sharp downside in the global equity space on further escalation of military tensions between Ukrainian and pro-Russia separatist/Russia forces, as well as continued Russia/NATO tensions in the background, NZD/USD has managed to push back above 0.6700 on Monday. As this Wednesday’s RBNZ meeting – where markets participants are split between expecting a 25 bps or 50 bps hike – looms, the pair has gained 0.4% on the session and is one of the better G10 performers on the day.

NZD/USD bulls are intent on testing earlier monthly highs in the 0.6730s although escalating geopolitical angst continues to weigh heavily on other risk assets (like stocks) and could yet spoil the party. This is a key area of support turned resistance so far in 2022 and a break above it would open the door to a run back towards 0.6800 and annual highs near the 0.6900 level. Geopolitics aside, while Wednesday’s RBNZ meeting steals the show this week, New Zealand Q4 Retail Sales figures out on Friday will be of note for the kiwi traders.

There will also be plenty of US data and Fed speak to keep an eye on, the highlights of which include flash February PMIs, the second estimate of Q4 GDP growth and January Core PCE inflation. Markets have dialed down bets on a 50 bps rate hike in March after key FOMC members pushed back against the idea last week. A hot Core PCE reading – which would come on the heels of elevated Consumer and Producer Price Inflation readings for January – would bolster expectations for a rapid series of rate hikes between now and the end of the year.