NZD/USD slumps below 0.6900 to refresh nine-month low on RBNZ’s hawkish hold

NZD/USD extends the heaviest fall since June after the RBNZ Interest Rate Decision.
RBNZ policymakers left benchmark interest rate unchanged but stay ready for a rate hike.
Market sentiment dwindles amid virus woes, Fed tapering concerns, NZ reports six new covid cases linked to the first one.
US dollar pullback awaits FOMC minutes for clearer direction, risk catalysts, Orr's presser are important too.

Anil Panchal FXStreet

NZD/USD takes offers around 0.6875, the lowest level in 2021, after the Reserve Bank of New Zealand (RBNZ) disappointed global markets with no rate change during early Wednesday.

In its latest moves, the RBNZ kept the benchmark interest rate unchanged at 0.25% versus the widely expected rate hike of 0.25%. Even so, the New Zealand (NZ) central bank said, “Committee discussed the merits of an increase in the OCR at this meeting and considered the implications of alternative sequencing of ocr changes over time.”

Read: Breaking: RBNZ keeps OCR unchanged at 0.25%, NZD/USD slumps

While reacting to the RBNZ moves, the NZD/USD traders ignore the US Dollar Index (DXY) pullback. That said, the DXY snaps a two-day uptrend while easing from a one-week high to 93.11 by the press time.

While the market sentiment remains pessimistic, led by the coronavirus woes, mixed comments from the US Federal Reserve policymakers seem to pull the DXY back amid a cautious mood ahead of the Federal Open Market Committee (FOMC) Minutes.

It’s worth noting that there are seven cases of the virus in New Zealand versus the previous day’s first reported from Auckland. Elsewhere, Australia’s New South Wales report all-time high covid cases, propelling the national count to the fresh top since August 2020 whereas China’s infection numbers eased at the latest.

Amid these lays, the US 10-year Treasury yields stay firmer around 1.26% but the S&P 500 Futures print mild losses by the press time.

Moving on, covid updates will be the key ahead of the FOMC minutes but the USD moves will be important to follow. It shuld be noted that RBNZ Governor Adrian Orr will hold a press conference soon and the NZD/USD is up for reacting on that too.

Read: FOMC Minutes July Preview: More new questions than answers

Technical analysis

A daily closing beyond 20-DMA, near the 0.7000 threshold, becomes necessary for the NZD/USD corrective pullback, until then, bears can aim for the 0.6900 round figure. If the quote remains weak below 0.6900, the 61.8% Fibonacci retracement of August 2020 to February 2021 upside, close to 0.6860, will be in focus. On the contrary, a descending resistance line from late May, around 0.7040, adds to the upside filters beyond the 20-DMA immediate hurdle.

Additional important levels

Overview
Today last price	0.6944
Today Daily Change	0.0024
Today Daily Change %	0.35%
Today daily open	0.692

Trends
Daily SMA20	0.6996
Daily SMA50	0.7014
Daily SMA100	0.7096
Daily SMA200	0.7112

Levels
Previous Daily High	0.7032
Previous Daily Low	0.69
Previous Weekly High	0.7063
Previous Weekly Low	0.6969
Previous Monthly High	0.7106
Previous Monthly Low	0.6881
Daily Fibonacci 38.2%	0.695
Daily Fibonacci 61.8%	0.6982
Daily Pivot Point S1	0.6869
Daily Pivot Point S2	0.6819
Daily Pivot Point S3	0.6737
Daily Pivot Point R1	0.7001
Daily Pivot Point R2	0.7083
Daily Pivot Point R3	0.7133

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD edges higher to mid-1.1600s; looks to US PCE Price Index for fresh impetus

The EUR/USD pair attracts some dip-buyers during the Asian session on Friday and recovers a part of the previous day's retracement slide from the 1.1680 region, or the highest level since October 17. Spot prices currently trade around mid-1.1600s and remain on track to register gains for the second straight week.

GBP/USD: Constructive view prevails above 1.3300 ahead of US PCE inflation data

The GBP/USD pair trades on a flat note near 1.3330 during the Asian trading hours on Friday. Traders prefer to wait on the sidelines ahead of the key US inflation report later on Friday. The US delayed Personal Consumption Expenditures Price Index report for September could offer some hints about the US interest rate path.

Gold flat lines above $4,200 mark; looks to US PCE Price Index for some meaningful impetus

Gold struggles to capitalize on the overnight bounce from the $4,175 area, or the vicinity of the weekly trough, and oscillates in a narrow trading range during the Asian session on Friday. Traders now seem reluctant and opt to move to the sidelines ahead of the September Personal Consumption Expenditures Price Index, or the Federal Reserve's preferred inflation gauge.

Pi Network: Bearish streak nears critical support trendline

Pi Network edges lower on Friday for the third consecutive day, approaching a local support trendline. The on-chain data suggests an increase in supply pressure as Centralized Exchanges experience a surge in inflows. Technically, the pullback in PI risks further losses, as the Moving Average Convergence Divergence indicator is flashing a sell signal.

Why the Fed may cut rates in December: Understanding the policy shift

The Fed has gone through a noticeable policy swing in recent months - from initiating a rate cut, to signaling a potential pause, and now shifting once again toward another cut in December. This has created understandable confusion among traders and investors trying to interpret the Fed’s reaction function.

XRP edges lower despite record on-chain activity and steady ETF inflows

Ripple is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.