Kiwi dollar traders are preparing for heightened volatility in the trading day ahead, with the Reserve Bank of New Zealand set to announce its latest interest rate decision. The escalating global trade war has caused the Kiwi to drop sharply over the past few sessions, falling nearly 6% in just three and a half days since its post-tariff rally to 0.5852. It is now hovering around key technical support, ahead of an anticipated rate cut from the central bank.
The market expects the RBNZ to lower interest rates from 3.75% to 3.50%. Given recent global developments and domestic data, a dovish statement is anticipated to accompany the move. Some outlying market participants suggest the RBNZ—known for acting decisively—could cut by 50 basis points today in response to recent geopolitical turmoil. Such a move would shake up the market, but for most traders, the focus will be on the degree of dovishness in the statement for trading opportunities.
The Kiwi is currently sitting very close to technical support—both from the long-term daily trendline on the majors and the 2022 low. A surprise 50 basis point cut or an even more dovish statement could break these levels and extend the downside move. On the other hand, anything less dovish than expected might prompt a relief rally, though this would likely offer traders more attractive levels to sell into given current market sentiment.
Resistance Levels:
- Resistance 1: 0.5852 – 2025 High
- Resistance 2: 0.5890 – 200-Day Average
Support Levels:
- Support 1: 0.5504 – Trendline Support and 2025 Low
- Support 2: 0.5468 – 2022 Low
