The Kiwi dollar drops after RBNZ tempered its unexpected 0.5% rate hike
The New Zealand’s dollar fell to one-month low in early Wednesday’s trading, after the RBNZ surprised markets by 0.5% rate hike, the biggest rate hike in more than twenty years (most of analysts expected a quarter percent increase).
The central bank tempered its strong hawkish stance by keeping its projection for the cash rate to peak at 3.35% at the end of 2023, adding that large rate hike lessens risk of inflation getting out of control that prompted investors to sell Kiwi dollar.
Fresh weakness signal continuation of the bear-leg from 0.7033 (Apr 5 high), with pivotal support at 0.6782 (50% retracement of 0.6529/0.7033 upleg / converged 55/100DMA’s) being under pressure, with break here to add to negative signals and open way for rally through daily Ichimoku cloud (0.6778/0.6727).
Rising bearish momentum and 5/200 and 10/200DMA’s death-crosses on daily chart, support the action, while broken Fibo 38.2% support (0.6841) now marks solid resistance, which should ideally cap and maintain bearish bias.
Res: 0.6841; 0.6876; 0.6901; 0.6920
Sup: 0.6782; 0.6741; 0.6722; 0.6674