Kiwi dollar traders anticipate a significant increase in volatility today as the currency comes into sharp focus ahead of the Reserve Bank of New Zealand’s latest interest rate decision. The market is fully pricing in a 50-basis-point rate cut, which has been well signposted by Reserve Bank Governor Adrian Orr. Any deviation from this expectation is likely to trigger substantial movement in the ‘flightless bird’.
As always, if the decision aligns with market forecasts, price action will be driven by the forward guidance provided in the accompanying statements and press conference. FX traders are bracing for strong moves, with NZD/USD currently hovering near key technical levels.
The Kiwi has been on the back foot for most of the year as the USD strengthened, but it has shown some recovery since hitting multi-year lows at the start of this month. It now sits near short-term resistance levels on the hourly chart, while also remaining relatively close to long-term support. A surprise in either the rate decision or policy guidance could trigger a significant breakout in either direction.
The market expects the RBNZ to maintain a dovish stance, with further rate cuts anticipated later in the year, albeit at a smaller scale. A less dovish tone could see recent highs quickly surpassed, whereas a more dovish stance could lead to a swift retest of early February’s lows.
Resistance 2: 0.5750 – 2025 High
Resistance 1: 0.5738 – Trendline Resistance
Support 1: 0.5676 – 200 Day Moving Average
Support 2: 0.5515 – 2025 Low and Trendline Support
