NZD/USD Collapses On RBNZ Rate Cut !

Last night, the Reserve Bank of New Zealand (RBNZ) cut the interest rate from 3.5% to 3.25%. The NZDUSD declined from suggested levels around 0.7200, at the moment hovering around 0.7000 levels, a further decline couldn’t be ruled out in the upcoming days…

RBNZ Governor Wheeler said that further cuts would be appropriate, a fall in NZD would help dairy farmers. anyway; looks like weak dairy prices and other weak demand weigh on the NZD…

Let’s take a quick look at the daily and weekly time frame:

In short term forecast; the pair has been rejected from the 0.7200 levels as we suggested before in our forecast, Immediate support comes at the 0.7000 levels, we might see hesitation but further down will target the 0.6880 levels. If seen, 0.7000 should serve as strong resistance ….overall outlook, as long as 0.7200 holds on a daily closing basis, the pair remains under heavy pressure…

In medium-term forecast: immediate resistance comes at the 0.7080 levels ahead of 0.7321 levels. stability below the 0.7080 levels on a weekly closing basis means the pair is very bearish, however ; next support comes around 0.6900 levels , a halt is very likely ,If seen, a rebound to 0.7080 levels could be seen before the next leg down towards the 0.6666 levels, a cut through the 0.6666 levels will pave the way towards the 0.6400 levels .

On the upside, sustained breakout – weekly closing – above the 0.7080 levels will suggest a recovery to the 0.7321 levels before the next collapse…..

Conclusion: as long as 0.7080 resistance holds on a weekly closing basis, the medium-term outlook in NZDUSD remains on the downside towards the 0.6900/0.6666 levels ahead of the 0.6400 levels. above 0.7080 faces a recovery risk towards the 0.7321 levels before the next fall…

RNZB rate cut

RNZB rate cut_002

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