In a surprising move during Wednesday’s Asian session, the Reserve Bank of New Zealand (RBNZ) not only cut interest rates by 25 basis points but also revealed that a 50 basis point cut was on the table. This decision led to a sharp decline in the NZD/USD pair, shedding 1.30% and hovering just below the 0.6000 mark.
RBNZ Governor Orr’s lack of new insights in Thursday’s Asian session further dampened market sentiment, as investors digested the implications of the central bank’s dovish stance. The RBNZ highlighted a slower-than-expected economy and inflation concerns, pushing the NZD into a bearish territory.
Technical Analysis and Chart Outlook
The Relative Strength Index (RSI) currently sits around 50, indicating a neutral market sentiment. However, the Moving Average Convergence Divergence (MACD) shows decreasing green bars, signaling a weakening bullish momentum. This suggests a potential reversal in the near future, with increasing selling pressure.
On the daily chart, immediate support for the NZD/USD pair is at 0.6000, with further downside targets at 0.5970 and 0.5930. Resistance levels are seen at 0.6040 and 0.6090, marked by the 100 and 200-day Simple Moving Averages (SMAs).
Looking ahead, bearish pressure is expected to persist in the NZD/USD pair, as technical indicators point towards a downward trend. Any additional dovish cues from the RBNZ could trigger further declines in the pair, impacting traders and investors alike.