The New Zealand dollar weakened against the US dollar recently after the Reserve Bank of New Zealand lifted interest rates by 25 bps to 0.75%, while many investors were hoping for a 50 bps hike. However, minutes of the meeting also showed that policymakers considered a faster pace of hikes, but chose to be cautious given the continuing pandemic and the very high levels of household debt. Meanwhile the US dollar strengthened thanks to the hawkish pivot of Federal Reserve policymakers.
NZDUSD has been moving in a strong downtrend recently. The current impulse started at the end of October, when price bounced off the upper limit of the 1:1 structure. Today, the price broke below the September lows, so there is a chance that the downward move may accelerate towards 0.6800 level. Should break below 0.6800 occur, sell-off could deepen towards support at 0.6700 which coincides with 127.2% external Fibonacci retracement. Source: xStation5
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