Key Points
- The New Zealand dollar moved higher against the US Dollar after the RBNZ rate cut.
- There was a major bearish trend line formed on the 4-hours chart of NZDUSD, which was broken during the recent upside move.
- Earlier today, the RBNZ Interest Rate Decision was announced by the Reserve Bank of New Zealand.
- The central bank decided to reduce the interest rates from 2.25% to 2% as forecasted.
Technical Analysis
The New Zealand dollar spiked higher earlier during the Asian session against the US dollar to trade above 0.7200. During the upside move, the NZDUSD pair broke a major bearish trend line formed on the 4-hours chart.
Moreover, the pair closed above the 21 hourly simple moving average, which is a positive sign for the bulls moving ahead.
The pair is currently correcting lower, but it may face buyers near the broken trend line and the 21 hourly SMA.
RBNZ Interest Rate Decision
Earlier today during the Asian session, the RBNZ Interest Rate Decision was announced by the Reserve Bank of New Zealand in which the market was expecting a rate cut from 2.25% to 2%.
The central bank did reduce the rates, which instead of pushing the Kiwi dollar down ignited a rally. The monetary policy statement highlighted that “Weak global conditions and low interest rates relative to New Zealand are placing upward pressure on the New Zealand dollar exchange rate. The trade-weighted exchange rate is significantly higher than assumed in the June Statement. The high exchange rate is adding further pressure to the export and import-competing sectors and, together with low global inflation, is causing negative inflation in the tradables sector“.
Overall, the market remains in an uptrend, and there are possibilities of more gains in the NZDUSD pair moving ahead.
