Kiwi dollar traders are preparing for more moves in the currency in the days ahead as the Reserve Bank of New Zealand delivers its latest rate call midway through the Asian trading session on Wednesday. Market expectation is for the central bank to keep the Official Cash Rate at 5.5% for the eighth straight meeting with another resiliently hawkish message. Last time out they predicted that they would not be looking to start any easing until at least Q3 2024 while inflation remains elevated at an annual rate of 4%, although many investors are looking at other economic indicators that show that the New Zealand economy is slowing.
This doubt on the message that we receive in the statement from the bank should lead to some good trading opportunities both against the greenback and on the crosses. The risk probably sits with a flush out of long positions that have been building up in the NzdUsd on the back of recent weaker US data and the hawkish RBNZ – they are now at their highest level since December 2021. Therefore, anything less hawkish from the RBNZ should see stronger moves to the downside as the Kiwi moves back into recent long-term ranges and targets a move back to 0.6000. If we see the more highly expected focus on inflation, then expect recent trends to continue and for the NzdUsd to challenge long-term resistance just above 62 cents.
Kiwi Daily Chart Levels
Resistance 2: 0.6370 – December 2023 High
Resistance 1: 0.6221 – Trendline Resistance and June High
Support 1: 0.6074 – 200 Day Moving Average
Support 2: 0.5900 – Trendline Support
