NZD/USD Rate Increases after the Decision of the Reserve Bank
NZD/USD Rate Increases after the Decision of the Reserve Bank of New Zealand
This morning the Reserve Bank of New Zealand (RBNZ) decided to keep interest rates unchanged at 5.5%:
→ the decision to keep the interest rate at this high level is made for the sixth time in a row;
→ the RBNZ said rates should remain high for some time to ensure inflation is contained;
→ this decision was expected - all 25 economists in the Bloomberg survey predicted it.
However, New Zealand's economy is in recession, with GDP contracting in four of the last five quarters — prompting market participants to speculate that the central bank will begin cutting rates in the second half of this year.
The market reaction was a slight strengthening of the New Zealand dollar. Thus, the NZD/USD rate today rose to its April high.
Technical analysis of the NZD/USD chart today shows that:
→ in 2024, there is some preponderance on the bearish side of the market, which is expressed by the formation of a downward channel (shown in red);
→ starting from the first of April, an upward impulse was formed (shown by blue lines), which allowed the price of NZD/USD to rise from the low of the year and reach the upper half of the red channel;
The level 0.60777 looks like current resistance, since it:
→ previously provided support (shown by blue arrows);
→ acts as an obstacle to growth within the blue lines (shown by the red arrow), as evidenced by the action of the NZD/USD price on April 9-10.
At the same time, the RSI indicator is in the overbought zone.
From a technical analysis perspective, the market is vulnerable to a pullback. The further development of the dynamics of the NZD/USD exchange rate today will have an important impact (will be published at 15:30 GMT+3) on the news about the inflation level in the US, which we wrote about yesterday.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
This morning the Reserve Bank of New Zealand (RBNZ) decided to keep interest rates unchanged at 5.5%:
→ the decision to keep the interest rate at this high level is made for the sixth time in a row;
→ the RBNZ said rates should remain high for some time to ensure inflation is contained;
→ this decision was expected - all 25 economists in the Bloomberg survey predicted it.
However, New Zealand's economy is in recession, with GDP contracting in four of the last five quarters — prompting market participants to speculate that the central bank will begin cutting rates in the second half of this year.
The market reaction was a slight strengthening of the New Zealand dollar. Thus, the NZD/USD rate today rose to its April high.
Technical analysis of the NZD/USD chart today shows that:
→ in 2024, there is some preponderance on the bearish side of the market, which is expressed by the formation of a downward channel (shown in red);
→ starting from the first of April, an upward impulse was formed (shown by blue lines), which allowed the price of NZD/USD to rise from the low of the year and reach the upper half of the red channel;
The level 0.60777 looks like current resistance, since it:
→ previously provided support (shown by blue arrows);
→ acts as an obstacle to growth within the blue lines (shown by the red arrow), as evidenced by the action of the NZD/USD price on April 9-10.
At the same time, the RSI indicator is in the overbought zone.
From a technical analysis perspective, the market is vulnerable to a pullback. The further development of the dynamics of the NZD/USD exchange rate today will have an important impact (will be published at 15:30 GMT+3) on the news about the inflation level in the US, which we wrote about yesterday.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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