• NZD/USD slipped lower on Tuesday after the Reserve Bank of New Zealand raised interest rates as widely expected, but signalled that the pace and extent of further tightening would be more gradual and limited than markets had anticipated.
• New Zealand’s central bank raised its official cash rate by 25 basis points to 2.75% on Wednesday and signalled that further rate increases were likely, although it stressed that any additional tightening would be gradual. The central bank also highlighted significant downside risks to economic growth.
• The decision was widely anticipated, with 27 of 31 economists surveyed by Reuters expecting the Reserve Bank of New Zealand (RBNZ) to raise its official cash rate by 25 basis points...
•Wednesday’s 25-basis-point increase leaves the cash rate well below its 5.50% peak reached in August 2024. The RBNZ subsequently embarked on an aggressive rate-cutting cycle as economic growth weakened and inflationary pressures eased.
• Immediate resistance is located at 0.5904(SMA 20), any close above will push the pair towards 0.5927(61.8%fib)
• Support is seen at 0.5824(50%fib) and break below could take the pair towards 0.5805(Lower BB).
Recommendation: Good to sell around 0.5850 with stop loss of 0.5900 and target price of 0.5780
