- NZD / USD remains on the back foot after RBNZ.
- The RBNZ maintained the OCR stable at 0.25% but widened the QE, the political decision-makers showed flexibility.
- A five-week-old support line on the bear radar below 0.6000.
- The 61.8% Fibonacci retracement, the highest in April, may draw buyers up.
After falling by more than 1.0% following the accommodative appearance of the RBNZ, the NZD / USD bears catch their breath around 0.6000, down 1.15% on a day, ahead of the European Open Wednesday.
While the expansion of Quantitative Easing (QE) and fears of negative rates offer a fundamental weakness to the pair, it is a break below 61.8% Fibonacci the retracement of the fall of March remains technical analysis in favor of sellers.
Nevertheless, a sustained break below 0.6000 will be necessary for the further decline towards a support line several days old, near 0.5970.
However, the pair’s weakness after 0.5970 may not hesitate to challenge the Fibonacci retracement at 50% and the April low, around 0.5960 and 0.5910 respectively.
On the contrary, a daily close beyond 61.8% of the Fibonacci retracement level at 0.6075 can renew the buying pressure towards the April high around 0.6175. In addition, an SMA at 100 days near 0.6265 can then please the bulls.
NZD / USD daily chart
Trend: expected decline