NZD jumps on RBNZ hawkish hike but struggles to hold gains

The New Zealand dollar rose 0.75% in immediate reaction to (expected) action of the RBNZ to raise interest rates by 25 basis points to 2.5%, earlier today.

This was the first rate hike in almost three years, with comments from the policymakers pointing to potential further tightening (although without timing for the future action), as some policymakers see increased inflationary risk, while others describe the outlook as balanced for now.

Overall, markets saw today’s decision as hawkish hike, with about 60% bets for another hike in September’s policy meeting.

The Kiwi dollar reversed a part of today’s post-rate gain, unable (again) to sustain break above initial barriers at 0.5712/16 (Fibo 23.6% of 0.5994/0.5626 / falling 20DMA) and capitalize from relatively strong bullish signals from the central bank’s decision.

Daily studies remain in predominantly bearish configuration that continues to produce headwinds to recovery leg from 0.5626 (new 2026 low posted on June 26), after two failures here have been already registered recently.

The downside is likely to remain vulnerable as long as price action holds below 0.5712/16 pivots, while firm break higher would signal bullish continuation and open way for further recovery towards next significant barrier at 0.5766 (Fibo 38.2% / falling 30DMA).

Res: 0.5716; 0.5766; 0.5810; 0.5840
Sup: 0.5672; 0.5626; 0.5600; 0.5565