Expectations for 25 basis point cut
Remember the RBNZ will annnounce their interest rate decision at 5 PM ET. The expectations call for 25 basis point cut. Lower 1st quarter GDP is the main catalyst as is lower commodity prices and inflation. The housing market remains a positive.
PM Key commented that the NZD had come down faster than expected and that led to a rally in the NZDUSD. Yesteday, the price peaked as the dollar selling helped push the price up. The 200 hour MA (green line in the chart above was broken in the process, but the price has since moved back below that MA line in trading today. Earlier today, the price tested the 100 hour MA (blue line in the chart above) but has come back between the "goal posts: as defined by the 100 and 200 hour MAs (blue and green lines)
The 100 hour MA is at 0.6569. The 200 hour MA is at 0.6616. On the decision, look for a break of either of those extremes and the market moving away (see hourly chart above).
On the downside, iandf the 100 hour MA is broken at 0.6569 and then 0.6554 (swing highs and lows over the last week), the next target would be the 0.6492 low from last week A move below that will next look toward the 0.6400 level. The 0.6400 is the 61.8% of the move up from the March 2009 low (see monthly chart below).
On the topside, if the RBNZ surprises with no change, or if the market has already discounted the event and starts to move higher, a move above the 200 hour MA will be step 1 (Pay careful attention for any failure above the 200 hour MA). Then look for 0.6644-57 to be the next targets (trend line and 38.2% retracement. The 0.6708 is the 50% retracement.