Nzdusd Moves On Rate Cut

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Nzdusd Moves On Rate Cut

NZDUSD Moves On Rate Cut

NZD/USD Moves Under 0.6100 On Rate Cut

RBNZ has delivered a 50 bps rate cut which was not received well by the New Zealand Dollar (NZD). After the rate cut, the OCR in New Zealand is now 4.75%.

The RBNZ's recent rate cut has pushed the NZD/USD lower and is now trading below the 0.6100 support. The rate cut by the RBNZ was larger than the forecast as the labor market has started to show signs of weakness. Additonally, the New Zealand's economy is also going through subdued growth.

RBNZ Cuts The Policy Rate By 0.50%

According to the market players, the RBNZ is highly likely to deliver a larger-than-expected rate cut in November 2024. This also means that we can expect some continued weakness in the NZD/USD.

look at the DXY (US Dollar index) shows that it is trading near 102.70 and is positive for the day. The strength of the US dollar comes from the positive sentiment of the market. A lot of market players now believe that the Fed will not cut the policy rate by 50 bps at the next meeting.

Now, the NZD/USD traders await the FOMC (Federal Open Market Committee) minutes for its last meeting in September. This could provide further clarity on the Fed's plans for interest rate policy.

The bottom line is that NZD/USD has lost its horizontal support at 0.6100 and is now trading on bearish terms. Also, the Kiwi pair is below the 50 EMA, located near 0.6173. So, as far as the medium-term direction of NZD/USD is concerned, it is bearish.

The momentum also favors the NZD sellers, as evident from the RSI (14), which is also printing a reading under 40. Any more downside from the current levels will send the NZD/USD toward the 0.600 support, followed by the next one at 0.5974.

On the way up, a break of the 0.6146 resistance will the pair to 0.6173 and then 0.6220. However, the current trend favors the NZD sellers as the RBNZ remains dovish.

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