Kiwi dollar traders are expecting to see some big moves in the currency tomorrow, no matter what call the Reserve Bank of New Zealand makes with regard to its rate decision on Wednesday this week. The central bank is widely expected to lower the Official Cash Rate (OCR) by 25 basis points to 3% at this meeting, but big questions will now be asked as to how many more cuts we can expect in this cycle, with the Kiwi economy still in the doldrums, a soft jobs market, and inflation currently sitting at 2.7%. This will be conveyed in the statements and the consequent press conference, and this is where we are likely to see a strong reaction in the currency.
The NZDUSD is currently sitting on a strong technical support level on the daily charts just above 59 cents, and a more dovish outlook from the RBNZ should see this level and recent lows break to open the way for a further move south. However, any hints that we are at the end of, or approaching the end of, the current cycle should see some strong buying come into the market and take the pair back into recent ranges, with initial resistance near August highs just under 60 cents.
Resistance 2: 0.6120 – Trendline Resistance and 2025 High
Resistance 1: 0.5995 – August High
Support 1: 0.5908 – Trendline Support
Support 2: 0.5855 – August Low
