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NZD/USD heavy, 200-DMA tested on RBNZ surprise rate cut

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 10, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    The NZD/USD pair keeps pushing lower, as the NZD battering extends towards the Chinese open, as markets continue to digest the unexpected RBNZ rate cut move.

    NZD/USD on its way to 0.6600?

    Currently, the NZD/USD pair drops -0.30% at 0.6630, recovering from fresh six-day lows reached below 200-DMA support 0.6621. The Kiwi extends its bearish momentum into a fourth day today, with the RBNZ surprise rate cut behind the latest sell-off.

    Markets were caught off-guard after the Reserve Bank of New Zealand (RBNZ) cut its benchmark rate by 25 basis points to a record low of 2.25%. Following the bank’s announcement, the bird was smashed almost 2 big figures from NY highs of 0.6810.

    Focus now remains on the Chinese CPI figures, with the prices expected to remain stagnant in Feb from a 1.8% rise seen in Jan y/y. Any negative surprise in the inflation figures could further exacerbate the pain in the Kiwi. China is the OZ economy’s biggest trading partner.

    NZD/USD Levels to consider

    To the upside, the next resistance is located at 0.6700 (round number), above which it could extend gains to 0.6746 (1h 50-SMA). To the downside immediate support might be located at 0.6608/00 (50-DMA/ round number) and from there to 0.6577/69 (daily S1/ Mar 1 Low).
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