New Zealand dollar slumps on RBNZ surprise rate hold

The New Zealand dollar fell sharply against its US counterpart on Wednesday, following surprise decision of the New Zealand central bank to keep interest rates unchanged against expectations for 25 basis point rate hike.
The pair was down 1.6% in immediate reaction to RBNZ decision, with signals from policymakers about further tightening in coming months, partially offsetting negative impact and preventing deeper fall.

Today’s drop to 0.5582 (the lowest in two weeks) retraced over 76.4% of 0.5565/0.5710 recovery leg that shifted near term focus firmly to the downside, with break below 20DMA (0.5633) and sharp loss of positive momentum (14-d momentum pressures the centreline) adding to strong negative signals.

Daily close below 20DMA will be required to keep fresh bears intact and maintain downside pressure.
Investors focus on today’s top event – Fed policy meeting, with the central bank widely expected to stay on hold, but signals about the near-future steps, expected to define US dollar’s near term direction.

Res: 0.5620; 0.5634; 0.5662; 0.5675
Sup: 0.5599; 0.5582; 0.5565; 0.5516