Last week's overview, this week's key events

Source: Dukascopy Bank SA
The New Zealand Dollar has been strengthening its positions as this year's most attractive currency. The Reserve Bank of New Zealand can now be called as the most decisive and brave central bank in the world. We were expecting more tightening in the recent months, however, there were doubts more action will come this month. Nevertheless, the RBNZ made its third consecutive rate hike during June's meeting, bringing the official cash rate to 3.25%, with a promise to make more revisions in the coming months. While there are rumours the central bank will take a pause in July, the long-term outlook is still extremely hawkish, as more rate hikes are on the radar. It seems that even in case of the disappointing GDP figures this Thursday, the NZD/USD pair will continue climbing higher. Moreover, the FOMC meeting is unlikely to provide a substantial support for the buck, keeping in mind sharp contraction in the first quarter, and a weaker-than-expected retail sales report that smashed hopes for a rebound in the second quarter. Over the last week, the NZD/USD pair soared more than 220 pips, and with only 179 pips left until the all-time high is reached, traders should be cautious about future moves, as following a retest of 0.8849, the pair can pull back and trade around the current level for some time. Meanwhile, EUR/NZD will continue falling down, as the Euro index lost 1.27% over the last week, with more losses ahead, as impact of the ECB decision to cut rates is feeding through the investors' sentiment.

An unexpected surprise was offered to markets by Mark Carney, the Bank of England Governor, who claimed investors, households and companies should prepare for a sooner-than-expected rate hike. This was his first hawkish comments, and it has reinforced bets the central bank can make the first adjustment even later this year. On the back of the positive data, the cable soared closer to 1.67-mark, and the pair has penetrated the upper trend line of the falling wedge pattern on the 4H chart, meaning the outlook is bullish. This week's inflation, retail sales and MPC votes repots are likely to provide an even more upbeat picture on the U.K. economy, and provide additional boost for the Sterling. A move above major level of 1.67 will clear the way for a weekly R3 and 2009 highs at 1.7014, while next strong resistance is located only 103 pips higher at 1.7117, represented by a monthly R2.
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