The Reserve Bank of New Zealand is set to update markets on interest rates on Wednesday this week, and traders are expecting to see some strong volatility in the Kiwi dollar as fundamentals take over from geopolitics for a while at least. The bank is set to keep rates on hold for the first time in six meetings after it has cut a total of 225 basis points since last August; however, it is expected to maintain a dovish bias with employment and housing numbers still slowing.
The Kiwi dollar has dipped in the last few days in line with the stronger greenback and fresh tariff updates from the US; however, it is now poised for good moves either side if the Kiwis decide to join their cross-Tasman cousins and give the market a bit of a surprise. The only real chance of a surprise comes with another cut, which would take the pair swiftly past short-term trendline support and down towards the June low. However, a more dovish update from the statement could also see a similar move, albeit over a longer time period, especially if we see more US dollar appreciation in the next few days. A much less dovish outlook could see the pair rally back swiftly toward recent annual highs and then the long-term resistance level just above 0.6150.
Resistance 2: 0.6170 – Long-Term Trendline Resistance
Resistance 1: 0.6120 – 2025 High
Support 1: 0.5986 – July Low and Trendline Support
Support 2: 0.5876 – June Low
