The RBNZ raise rates by 50 basis points as expected. In addition they also increase their expectations for rates going forward:
- In September 2022, the RBNZ expects the official cash rate to be 2.68% (previous 1.89%).
- By June 2023, the RBNZ expects the official cash rate to be 3.88% (previous 2.84%).
- In September 2023, the RBNZ expects the official cash rate to be 3.95% (previous 3.1%).
That 3.95% is expected to be the peak says the RBNZ. The peak was previously seen at 3.35% by the Bank.
The action initially led to a spike higher in the NZDUSD. The high price from Friday was breached at 0.64896. The high price for the day reached 0.65135. However, that high fell short of the 38.2% retracement of the move down from the April 5 high at 0.65289. Moreover,after the price move back below the old high from last week near 0.64896, buyers started to turn back to sellers, and the price has been stepping lower since then.
The low price just reached 0.64359. That was just above the rising 100 hour moving average at 0.64316. Note that before the rate decision, the price of the NZDUSD tested that 100 hour moving average as well.
Traders should lean against the 100 hour moving average as risk is defined and risk and limited. However, a move below the 100 hour moving average would increase the bearish bias at least in the short-term, and will likely increase selling momentum on the disappointment from the price action.
The low price from earlier in the day at 0.64155. The high price from last Wednesday reached 0.64167. The high price from Thursday reached 0.64127. Move below that area and it further increases the bearish bias in the short-term.
