NZD/USD eagerly awaits RBNZ interest rate decision


After completing the Inverse Head & Shoulder (H&S) price pattern last week, NZD/USD slid down about 100 pips, leaving a classic shooting star candle on the chart which is acting as a critical resistance for the pair. Investors are seen very cautious ahead of the Reserve Bank of New Zealand (RBNZ) interest rate decision which is scheduled on Wednesday.

At the time of writing, the pair is being traded near 0.8457. The first resistance is being noted around 0.8522 which is the high of the shooting star. A break above 0.8522 shall expose the channel resistance as demonstrated in the following chart.

NZD/USD eagerly awaits RBNZ interest rate decision

On the downside, support is seen near 0.8400 handle which is the lower trendline support. A break and daily close below the channel support might aggravate the bearish momentum, targeting 0.8241 which is the swing low of the previous downward wave. The bias shall remain bullish as far as the pair is being traded above 0.8241. It is pertinent that both the Relative Strength Index (RSI) as well as the Commodity Channel Index (CCI) have entered into the overbought territory with readings above 70 and 100 respectively.

On Wednesday, RBNZ is likely to announce a hike in the benchmark interest rate to 2.75%, according to the average forecast of different analysts, surveyed by Bloomberg. Rapid increase in the house prices has provided adequate reasons to the policymakers for the first rate hike. The construction costs in New Zealand rose last year at the fastest pace since 2008 thanks to the record low interest rate, high purchasing power, low jobless rate, and tempting incentives offered by the government to the housing sector. Keeping in view the sharp increase in the price of NZD/USD, due to the optimism of rate hike, it appears that the pair will show only a moderate spike if RBNZ announces the interest rate hike. 

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: Dollar Falls from 10-month High Market Analysis: US Currency Continues to Grow Ahead of GDP Data Release Market Analysis: Gold and Commodity Currencies Resume Their Decline Market Analysis: EUR/USD Takes Hit While USD/CHF Surges Market Analysis: The Yen and European Currencies Headed to New Lows

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: Inflation, EUR/USD, S&P 500, OIL

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. Inflation Still Dogs the

Forex Analysis

Market Analysis: Dollar Falls from 10-month High

EUR/USDThe euro rose on Thursday as the dollar retreated since investors remained cautious ahead of key inflation figures due on Friday. Data on Thursday showed the US economy maintained fairly strong growth in Q2, with an unrevised annual rate


US 30 Analysis: Dow Jones Finds Support

September is likely to be the second month in a row that the Dow Jones (US 30) stock market index declined. The last time this happened was... also in September, a year ago. Important economic data was published yesterday: → According

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.