Missed the NZD trade? What’s next?

  • The RBNZ kept interest rates unchanged but delayed the timing for a rate cut and considered a rate hike, causing the NZDUSD to rise unexpectedly.
  • Despite this, bullish momentum was capped, with resistance seen at 0.6148-0.6159, and Governor Orr’s less hawkish comments later pushed the price back down.

As expected, the Reserve Bank of New Zealand (RBNZ) kept interest rates unchanged yesterday but did provide some surprises to the market; extending the timeline for a potential rate cut, and even noted its consideration of a rate hike. This unexpectedly hawkish stance sent the NZDUSD higher. 

Before the announcement, markets saw an ~80% chance of a rate cut by November, but this probability has now dropped to ~50%. 

Despite this, bullish momentum seemed capped. After probing above 0.6117 several times (with diminishing conviction), buyers turned into sellers. Governor Orr’s comments during the post-decision press conference were perceived as slightly less hawkish, which helped push the price back down. Additionally, over in the US, minutes from the two-day Federal Open Market Committee meeting ending May 1 showed that while participants felt the policy was “well positioned,” several officials expressed a willingness to tighten policy further if necessary. 

If the price declines, the next key target could be the 100-day moving average at 0.60712, which coincides with a 50% Fibonacci retracement level. However, support is potentially located at .60830 before this, with resistance kicking in at the session high above .6150.   

Import the BlackBull Markets Economic Calendar to iCloud, Google, or Outlook to get alerts direct to your inbox, enabling you to plan your positions in advance. 

    

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