NZD/USD ends strongly higher above key 0.6700 as the Kiwi outperforms over the week

• Kiwi, the top performer of the week among majors after RBNZ meeting, supported by risk appetite.
• US Dollar Index ends week flat, consolidating monthly losses. 
• Critical event ahead: G20 and Trump/Xi meeting looking for a trade deal.  

The kiwi rose on Friday and completed five days in-a-row with gains versus the US Dollar. The positive tone of the Antipodes continued even ahead of the G20 summit. 

The NZD/USD pair reached on Friday at 0.6719, the highest level since mid-April and it was about to end the week around 0.6710. Among majors, the kiwi was the best performer supported by an improvement in risk appetite, higher commodity prices and by the RBNZ. 

The central bank kept its cash rate unchanged at 1.5%, as expected and said lower interest rate might be needed over time, amid a weaker global outlook and risks of ongoing subdued growth. The bank kept a dovish bias but “but not aggressively so,” explained BNZ analysts. 

Regarding the US Dollar, it continued to move lower amid rate cut expectations from the Federal Reserve and the decline in US yields. The DXY finished the week flat but suffered the worst monthly decline since January 2018. 

Attention over the weekend will be on what happens in Japan with the G20 summit and the meeting between Trump and Xi Jinping on Saturday. The outcome will likely impact on the opening. 

NZD/USD back to the Q1 range? 

The weekly chart shows the pair posted the second weekly gain in-a-row and has risen above the 20-week moving average (first time since March) that is flattening and potentially turning to the upside. It also climbed above the 0.6680/0.6700 resistance; if it remains on top, more gains seem likely. 

The move higher could mean a return to the trading range that prevailed during the first quarter between 0.6900 and 0.6700. Also could signal that it has bottomed at 0.6480. The mentioned level was tested last week, but one more time, it found buyers.