The NZD/USD pair has retreated to 0.6100 after reaching 0.6150 following a hawkish statement from the Reserve Bank of New Zealand (RBNZ). The RBNZ decided to keep its Official Cash Rate (OCR) steady at 5.5%, citing persistent price pressures as a reason for delaying any rate cuts.
Investors are now waiting for the release of the Federal Open Market Committee (FOMC) minutes to gauge the future direction of the US Dollar. The US Dollar Index (DXY) has risen to 104.70, indicating strong support for the currency.
Despite the retreat, the New Zealand Dollar still maintains significant gains against the US Dollar amid speculation that the RBNZ will delay rate cuts compared to the Federal Reserve. RBNZ Governor Adrian Orr mentioned the possibility of delaying rate cuts due to inflationary pressures, with the expectation that inflation will return to the 1%-3% band by the end of the year.
Technically, the NZD/USD pair remains firm after breaking out of a Falling Channel formation on the daily chart. The asset has extended its recovery to the 50% Fibonacci retracement level at 0.6130, with the Relative Strength Index (RSI) indicating bullish momentum.
An upside move above 0.6160 could drive the pair towards 0.6200 and 0.6250. Conversely, a downside break below 0.6050 may lead to a decline towards 0.6000 and 0.5969.
Overall, the NZD/USD pair’s movement is influenced by the RBNZ’s hawkish stance and the upcoming FOMC minutes, which will provide further clarity on the US Dollar’s direction.