NZDUSD enjoys elevated volatility following a bigger-than-expected rate hike from Reserve Bank of New Zealand (RBNZ). RBNZ announced a 50 basis point rate hike on Wednesday, pushing the official cash rate to 5.25%. This comes after a 50 basis point rate hike in February. Money markets as well as economists expected RBNZ to slow pace of tightening to 25 bp rate hikes at a meeting today but no such thing took place. Moreover, RBNZ noted in a statement that further tightening will be needed to bring inflation down to 1-3% target. Inflation in New Zealand stood at 7.2% YoY in Q4 2022. RBNZ peak rate expectations have moved from 5.25% in July to 5.4% in August.
As the RBNZ decision and rhetoric turned out to be much more hawkish than expected, it should not come as a surprise that the New Zealand dollar caught a bid. NZDUSD broke above the rising wedge pattern and rallied further until it ran into the 0.6363 resistance zone. Bulls failed to break through this resistance and a pullback was launched with the pair pulling back to 0.6310 support. The pair has traded around this level since.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appShould bulls regain control, another attempt at breaking the aforementioned resistance zone cannot be ruled out. However, if sellers remain in control, a drop towards the 0.6273 may be on the cards.
NZDUSD at H1 interval. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
