The Reserve Bank of New Zealand (RBNZ) is widely expected to keep its Official Cash Rate (OCR) on hold at 5.5% for the final policy meeting of 2023 tomorrow at 2:00 am GMT, a move that marks a fourth consecutive meeting on hold.
As you can see from the image below, the implied probability for tomorrow’s meeting is for the OCR to remain unchanged with one 25bp rate cut currently priced in by around mid-2024. All 21 economists surveyed by BBG and all 28 economists surveyed by Reuters unanimously forecast that the central bank will hold the line. Consequently, market focus will be directed to the post-rate statement, with market participants monitoring for any language change, particularly regarding the outlook for rate cuts. RBNZ Governor Adrian Orr will also take the stage at the post-meeting press conference an hour later (3:00 pm GMT).
NZD/USD Nearing Fibonacci Confluence
The New Zealand dollar is up more than 5.0% on the month against its US counterpart, notching up its largest one-month gain since November 2022. This almost one-sided advance has seen the NZD/USD chalk up four back-to-back days of gains and land daily price within striking distance of what is often referred to as an ‘alternate’ AB=CD bearish formation at $0.6148: a 1.272% Fibonacci projection ratio.
Joining this level is a 200% extension ratio at $0.6150, a 61.8% Fibonacci retracement ratio at $0.6173, a 50.0% retracement ratio at $0.6156, as well as a resistance level at $0.6171. This area boasts sizeable technical confluence and offers traders/investors a resistance base to work with between $0.6173 and $0.6148.
NZD/USD Daily Chart:
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