Advertisement
Advertisement

RBNZ Rate Decision; NZD Closing in on Resistance

By:
Aaron Hill

With the RBNZ rate decision fast approaching, the NZD/USD currency pair is also fast approaching major resistance.

New Zealand dollars, FX Empire

In this article:

RBNZ Expected to Hold

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).

(Bloomberg)

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:

(TradingView)

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

About the Author

Aaron Hillcontributor

Aaron graduated from the Open University and pursued a career in teaching, though soon discovered a passion for trading, personal finance and writing.

Did you find this article useful?

Advertisement