At the conclusion of today's meeting, the leaders of the Reserve Bank of New Zealand kept the interest rate unchanged at 5.50%. In an accompanying statement, they mentioned the possibility of further interest rate hikes if necessary.
Immediately after the publication of this decision, the New Zealand dollar sharply strengthened, and the NZD/USD pair jumped during the Asian trading session to the level of 0.6207, the highest since August 2.
However, later on, the pair turned lower amid attempts by the U.S. dollar to recover from its recent significant decline over the past few weeks.
As of writing, NZD/USD was already trading near 0.6147, 60 points below today's peak.
Whether the decline will continue or a corrective rise will resume will be known very soon upon the release of important macroeconomic data from the U.S. at 13:30 (GMT). If the data turns out to be strong, the U.S. dollar will attempt to build on its success, and the NZD/USD pair will continue to decline.
In this case, a break of today's low at 0.6129 and the 200 EMA on the 15-minute chart will be the first signal to resume short positions. A breakdown of the key support level at 0.6065 (200 EMA on the daily chart) and further decline will bring NZD/USD back into the zone of the medium-term bearish market, once again making short positions preferable. A break of the support level at 0.6030 (144 EMA on the daily chart) will confirm this assumption.
In an alternative scenario, if today's macroeconomic data from the U.S. turns out to be weak, the corrective rise of NZD/USD will continue from the current levels. After breaking today's high of 0.6207, NZD/USD will head towards the key resistance level of 0.6345 (144 EMA on the weekly chart). A breakout of the key resistance level at 0.6440 (200 EMA on the weekly chart) and the level of 0.6485 (50% Fibonacci level in the pair's downward trend from the level of 0.7465 in February 2021 to the level of 0.5510 reached in October 2022) will lead the pair into the long-term bullish market.
For now, long positions are preferable above support levels 0.6129 and 0.6095 (50 EMA on the weekly chart), and the most "quick" signal for new longs will be a breakout of the local resistance level at 0.6175.
Support levels: 0.6129, 0.6095, 0.6065, 0.6030, 0.6000, 0.5973, 0.5960, 0.5900, 0.5890, 0.5860, 0.5775
Resistance levels: 0.6175, 0.6200, 0.6207, 0.6258, 0.6300, 0.6345, 0.6400, 0.6440, 0.6485, 0.6500
Trading Scenarios:
Sell Stop 0.6120. Stop-Loss 0.6180. Targets 0.6095, 0.6065, 0.6030, 0.6000, 0.5973, 0.5960, 0.5900, 0.5890, 0.5860, 0.5775
Buy Stop 0.6180. Stop-Loss 0.6120. Targets 0.6200, 0.6207, 0.6258, 0.6300, 0.6345, 0.6400, 0.6440, 0.6485, 0.6500
"Targets" correspond to support/resistance levels. This also does not mean that they will necessarily be reached, but can serve as a guide when planning and placing your trading positions.
