NZD/USD has been bearish for a long time, but in October it turned pretty bullish, due to an improving sentiment in financial markets which came mainly from the US-China partial trade deal. As a result, this pair climbed more than 250 pips, but the climb stopped at the 100 SMA on the daily chart.

During the last few weeks though, NZD/USD has been trading in a range, as uncertainty increased, bouncing between 0.6320s at the bottom and 0.63.40-50 at the top. Last week, this pair made a bearish move down, sliding lower from the top of the range.

But yesterday, the Reserve Bank of New Zealand (RBNZ) kept interest rates on hold at 1.00%, against expectations of yet another rate cut, which would bring them down to 0.75%. So, that was a bit unexpected and the NZD surged more than 80 pips higher yesterday.

It wasn’t totally a surprise, because the FED and the ECB seem to have stalled rate cuts now, while the Reserve Bank of Australia chairman Lowe said in the last meeting that rate cuts are already having an effect in the Australian economy, so the situation should be similar in New Zealand as well. Anyway, NZD/USD climbed higher yesterday and now the 200 SMA (purple) is providing support for this pair on the H4 chart.

This moving average has been providing mild support for this pair and, if it is to do the same now, we should see NZD/USD bounce higher off this moving average. The previous H4 candlestick closed as a doji, which is a bullish reversing signal after the pullback this morning. We might go long from here, but the sentiment has turned negative today and AUD/USD is declining fast, as is EUR/USD. So, we will follow the price action for a while and make a decision then.