The NZDUSD fell sharply when the inflation expectations index came in weaker than expected The fall took the price to a low for the day at 0.63245. The high for the day reached 0.6367 before the report.
The lower inflation may kick the RBNZ to cut in the new trading day. The expectations is for a 25 basis point cut, but it is not unanimous.
The market is pricing a 76.4% chance of a cut via the New Zealand OIS market. A survey of 21 economists by Bloomberg comes to a similar conclusion. Of the 21 surveyed 16 are expecting a cut and 5 see rates unchanges at 1.0%. That is also a 76% cut for and 24% against a cut.
Technically, the move lower today took the price below the 200 bar moving average on the 4 hour chart at 0.63409. Above that is the falling 100 hour moving average at 0.63507. A move above each - and staying above - would tilt the bias a little more to the upside with risk at the broken levels. Move above that moving average will look toward the topside trend line and 0.6366, and then the converge 100 bar moving average on the 4 hour chart and 200 hour moving average at 0.6381 area.
On the downside to 0.63199 level was the low from last week. Today the floor has been just above that level at 0.63245.
Drilling to the daily chart below, a lower trendline comes in at the 0.6300 level. That's nice round natural support level. Below that the 0.62546 – 694 area was home to swing lows on the from September and again in October. The low for the year, and the lowest level since August 2015, comes in at 0.62031. A break below open the door for further downside momentum.
SUMMARY: Traders are going into the rate decision near recent lows over the last month or so, but still a bit a ways from the 0.6203 lowest level since 2015. The technical levels are place. It will be up to the price action. The close break on the downside is 0.6324 and 0..6319. On the topside, get above the 063409 and the 100 hour MA at 0.63503, would be more bullish.