Wednesday 8th Feb, at 22:00 GMT, the Reserve Bank of New Zealand (RBNZ) announced the Interest rates remain unchanged at a record low of 1.75%, in line with expectations.
The RBNZ adopted a dovish outlook, forecasting the rates will remain at this level until June 2019, tempered by global uncertainty. The statement for the year implies no further rate cuts and rate hikes in the following two years or longer.
The RBNZ’s dovish statement follows the Reserve Bank of Australia (RBA) announcement which was made two days ago.
NZD/USD has remained bullish since the beginning of this year, trading along the downside uptrend line support. However, since early February, the bullish momentum has waned.
On the 4 hourly chart, the level at 0.7300 was broken by a long bearish candle on 8th Feb. The level has turned into the near term major resistance.
After the RBNZ announcement, NZD/USD plunged to a two-week low of 0.7190. It is currently testing the key support line at 0.7200.
On the 4 hourly chart, the Stochastic Oscillator is below 20, suggesting a rebound.
However, the price is trading below both the long term and the short term moving averages, indicating upside pressure is heavy.
The resistance level is at 0.7225, followed by 0.7245 and 0.7270.
The support line is at 0.7200, followed by 0.7170 and 0.7150.