#NZDUSD @ 0.61772 drops nearly 50 pips even as RBNZ matches rate hike expectations. (Pivot Orderbook analysis)
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- NZD/USD drops nearly 50 pips even as RBNZ matches rate hike expectations.
- RBNZ matches market expectations of announcing 0.25% OCR hike.
- Pullback in US Dollar, Treasury bond yields put a floor under Kiwi pair prices.
- RBNZ’s Orr, US debt ceiling negotiations and Fed Minutes are the key for further directions.
The pair currently trades last at 0.61772.
The previous day high was 0.6303 while the previous day low was 0.6233. The daily 38.2% Fib levels comes at 0.626, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6277, expected to provide resistance.
NZD/USD nosedives nearly 50 pips to 0.6190 as it fails to cheers the Reserve Bank of New Zealand’s (RBNZ) 25 basis points (bps) of rate hike on early Wednesday.
RBNZ announces 0.25% increase to its Official Cash Rate (OCR), as expected, during May month monetary policy meeting. It’s worth noting that the RBNZ defends its cash rate peak at 5.5% and exert downside pressure on the NZD/USD prices.
Also read: Breaking: RBNZ hikes rates by 25 bps to 5.50% in May, widely expected
Earlier in the day, New Zealand’s first quarter (Q1) Retail Sales marked a contraction of 1.4% QoQ versus -0.4% expected and -0.6% prior while the YoY figures dropped to -4.1% versus -4.0% previous readings.
It’s worth observing that the US Dollar Index (DXY) retreat eclipsed the NZ data-led pessimism for the NZD/USD earlier in the day. That said, the greenback’s gauge against the six major currencies struggles to extend two-day advances at the highest levels in nine weeks, grinding near 103.50 by the press time.
While tracing reasons for the US Dollar’s latest pullback, a lack of progress in the talks to avoid the US debt ceiling expiration and fears that the US may mark the ‘catastrophic’ default gain major attention. Additionally, the latest retreat in the US Treasury bond yields also challenges the greenback ahead of the key Fed Minutes. Even so, hawkish Fed bets and recently upbeat US data keep the USD bulls hopeful, which in turn prod the NZD/USD run-up.
While portraying the market’s mood, S&P500 Futures ignore Wall Street’s downbeat performance to print mild gains whereas the US 10-year and two-year Treasury bond yields retreated from the highest levels since early March the previous day.
Having witnessed the initial market reaction to the RBNZ Interest Rate Decision, the NZD/USD pair traders will keep their eyes on a press conference by RBNZ Governor Adrian Orr. Should the policymaker manages to defend the hawkish bias, the Kiwi pair may have further upside to track, especially amid the recent retreat in the US Dollar.
Following that, major attention will be given to the US debt ceiling talks and Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting for clear directions. If the US policymakers manage to overcome the default fears, as well as the Fed Minutes appear hawkish, the US Dollar may regain its charm and can exert downside pressure on the NZD/USD price.
A daily closing below a one-month-old ascending support line, around 0.6225 by the press time, becomes necessary for the NZD/USD bears to retake control. Until then, the hopes of witnessing another battle with the key resistance line stretched from early February, close to 0.6385 at the latest, can’t be ruled out.
Technical Levels: Supports and Resistances
NZDUSD currently trading at 0.625 at the time of writing. Pair opened at 0.6248 and is trading with a change of 0.03% % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 0.625 |
| 1 | Today Daily Change | 0.0002 |
| 2 | Today Daily Change % | 0.03% |
| 3 | Today daily open | 0.6248 |
The pair is trading above its 20 Daily moving average @ 0.6237, above its 50 Daily moving average @ 0.623 , below its 100 Daily moving average @ 0.6273 and above its 200 Daily moving average @ 0.6156
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 0.6237 |
| 1 | Daily SMA50 | 0.6230 |
| 2 | Daily SMA100 | 0.6273 |
| 3 | Daily SMA200 | 0.6156 |
The previous day high was 0.6303 while the previous day low was 0.6233. The daily 38.2% Fib levels comes at 0.626, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6277, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 0.622, 0.6191, 0.6149
- Pivot resistance is noted at 0.629, 0.6332, 0.636
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 0.6303 |
| Previous Daily Low | 0.6233 |
| Previous Weekly High | 0.6306 |
| Previous Weekly Low | 0.6117 |
| Previous Monthly High | 0.6389 |
| Previous Monthly Low | 0.6111 |
| Daily Fibonacci 38.2% | 0.6260 |
| Daily Fibonacci 61.8% | 0.6277 |
| Daily Pivot Point S1 | 0.6220 |
| Daily Pivot Point S2 | 0.6191 |
| Daily Pivot Point S3 | 0.6149 |
| Daily Pivot Point R1 | 0.6290 |
| Daily Pivot Point R2 | 0.6332 |
| Daily Pivot Point R3 | 0.6360 |
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