NZD / USD low for day before European trading
The main lessons from the central bank’s policy decision are that they have almost doubled their quantitative easing program while reaffirming that they are ready to further lower its cash rate if necessary, even leaving the option of negative rates on the table.
The latter in particular must be wary because it could be particularly damaging to the kiwi – from the point of view of yields, even more than it has already done – if the market began to strongly evaluate such a possibility in the months to come.
The NZD / USD fell after a slight boost to 0.6098 to 0.6000 currently. The level of the figure maintains the decline with some support also observed around 0.5992-94.
Beyond these levels, support for the trend line @ 0.5978 also wants to be watched.
Currently, sellers also control the break under key hourly moving averages. The first target of 0.6000 has been reached and we now have to see if the sellers are more convinced to bring prices down from now on.
From a technical point of view, a fall below 0.6000 can be a worrying signal of more pain coming with additional support only seen closer to 0.5978, then around 0.5922 thereafter.
Basically, things are not going too well with the RBNZ leaving negative rates as an option when the Fed opposed it this week. Fed Chairman Powell is also expected to come back to this later today.