NZD/USD is trading at 0.6490, having hit a high of 0.6588 and low of 0.6376 earlier today. Despite the pullback, the outlook as per the 4-hour chart remains strongly bearish, as the RBNZ changed the trend of the pair with a new interest rate.
The Reserve Bank of Newzleand slammed the market with a 0.50% rate cut. The Reserve Bank has presented a tremendous surprise by cutting the Official Cash Rate to 1.00% from 1.5% and states that the lower rate was required for it to continue to satisfy its employment and inflation objectives.
As a result, NZD/USD has violated the double bottom support level of 0.6495, causing a sharp drop of 0.6370.
As you know, the sell-off came in response to a sudden and unexpected change in the RBNZ interest rate decision.
NZD/USD is now likely to fall further towards 0.6370, while the resistance and retracement level stays around o.6495.
RSI and Stochastics are massively oversold, but the intensity of the news is pretty sharp.
Key Trading Level: 0.6562
NZD/USD – Trade Idea
Consider staying bearish below 0.6470 as the market may slightly bounce off before drop further. On the lower side, NZD/USD may target 0.6380.