NZDUSD continues south for the second day in a row, trading 0.39% lower at 0.6336 piercing the lows from January 2016. RBNZ Governor Adrian Orr said that the recent interest rate cut reflected expectations of a decline in trading growth, lower New Zealand inflation expectations, and a swing by central banks to lower interest rates. The cut reduces the probability of having to do more later. Reserve Bank of New Zealand cut aggressively the OCR by 50bp to 1.00%, while the market forecasting a 25bp cut. The RBNZ Monetary Policy Committee expects growth to remain soft in the near term. RBNZ has revised its GDP forecasts lower accordingly by -0.3 to -0.5 through the second quarter of next year.
NZDUSD technical analysis is bearish for the pair as it trades below all major daily and hourly moving averages. The pair is facing two important support levels from 2015. First support stands at 0.6259 the low from August 2015 and then at 0.6235 the lows from September 2015; above those crucial levels a stop for the pair could be the 0.63 round figure. On the upside, immediate resistance stands at 0,6396 yesterday’s high and then at 0.6498 the high from August 9th. The RSI index has reached oversold levels at 27.21 which might lead to a quick rebound above 0.64. All in all NZDUSD momentum is bearish and, a visit down to 2015 lows looks possible.