NZD/USD Price Analysis: Key levels to watch into the RBNZ's Survey of Expectations

• NZD/USD is trying to correct the bearish impulse. 
• NZD/USD traders start to roll up their sleeves for RBNZ's Survey of Expectations
• Bears are looking for a downside extension while bulls are banking on a hawkish RBNZ hike. 

NZD/USD is in a precarious position on the charts as we head into the key event today, RBNZ's Survey of Expectations and before the forthcoming interest rate meeting. Today's event is watched closely for signs that expectations are drifting away from the 2% target.

''Market pricing is sitting at roughly 60/40 in favour of a 25bp hike vs 50bp, and we’re expecting a 25bp hike as well. We can’t rule out a 50bp move,'' analysts at ANZ Bank explained.

''But risks to employment and growth are at best balanced and at worst to the downside, and the construction sector is facing a lot of headwinds. Moving in well-signalled 25bp increments can achieve a similar tightening in financial conditions compared with a 50bp hike, but without jolting the economy as much.''

The following is a breakdown of the market structure ahead of these events. 

NZD/USD daily chart

NZD/USD is on the verge of a deeper correction to test the 38.2% Fibonacci retracement level near 0.7020 which could be the last stop ahead of a downside continuation. A break of the current lows opens risk to the 0.6950's at least:

However, should there be renewed speculation that the RBNZ is about to hike by 50bps, then the upside will most definitely be to play for in the kiwi. With that being said there could be better places to go and trade the kiwi against, such as AUD for the divergence of central banks. 

In such a scenario, 0.7100 will be eyed vs the greenback:

For the upcoming event, we have two areas of resistance at 0.7040 and 0.7020: