• NZD/USD fell to a six-month low on Wednesday after the RBNZ cut rates by 50 bps and signaled scope for further easing amid ongoing economic weakness.
• New Zealand’s central bank delivered a surprise 50 bps rate cut on Wednesday, citing concerns over the fragile economy.
•The central bank has cut rates by 300 basis points since August 2024, and with inflation within its target band of 1% to 3%, policymakers have leeway to lower borrowing costs further..
• The dovish stance offers some relief to the New Zealand government and Prime Minister Christopher Luxon, whose popularity has slumped in recent months as the promised economic recovery has yet to materialize.
• Immediate resistance is located at 0.5800(38.2%fib), any close above will push the pair towards 0.5856(50%fib).
• Support is seen at 0.05734 (23.6%fib) and break below could take the pair towards 0.5708(Lower BB).
Recommendation: Good to sell around 0.5760 with stop loss of 0.5800 and target price of 0.5680
