The NZD/USD pair experienced a sharp decline on Wednesday morning, dropping nearly 1% for the session. This was largely due to the Reserve Bank of New Zealand’s dovish stance on interest rates. The central bank decided to keep rates unchanged at 5.5%, as expected, but hinted at the possibility of a rate cut if inflation continues to decrease as anticipated.
The currency pair broke through key technical support levels at 0.6100 and 0.6089/80, putting pressure on the important support level at 0.6047. A daily close within a cloud would confirm a bearish signal, potentially leading to further downside. Negative momentum on the daily chart and a bearish setup of the daily Tenkan/Kijun-sen also contribute to the negative near-term outlook.
Any corrective upticks in the NZD/USD pair should ideally be limited by the cloud top and not surpass the daily Tenkan-sen, providing opportunities for selling. Key resistance levels to watch include 0.6089, 0.6100, 0.6134, and 0.6153, while support levels are at 0.6047, 0.6036, 0.6025, and 0.6000.
For those interested in the technical aspects of the NZD/USD pair, it is advised to monitor the key levels closely for potential trading opportunities.