The RBNZ is expected to raise rates by 50 bps to 3.0% from 2.5%. The hike will be the 7th in a series since October 2021. The RBNZ was one of the first to raise rates. They started with a 25 basis point hike to 0.5% in October. The last 3 have been by a greater 50 basis points (this would be the 4th one of 50 bps).
The target rate before the pandemic was at 1.75%. Above that had a peak at 3.5% from July 2014 to April 2015. A rate of 3% will be within 50 basis points of that peak.
Since the RBNZ has started the hikes, the NZDUSD has generally moved lower. The price it did correct higher in early January into early April, but has since rotated back to the downside bottoming in mid July after briefly cracking below a lower trendline on the daily chart, but faliling.
Since then, the price has been correcting to the upside which culminated with the pair moving above its 38.2% retracement of the last move down from the April high at 0.64318, and also above its falling 100 day moving average (currently at 0.6424). Below those levels is a swing area between 0.6377 and 0.63948.
The break above the 38.2% and 100 day moving average failed with momentum it yesterday after the weaker China data over the weekend. The price also moved below the aforementioned swing area (below 0.63778).
On the daily chart, getting above the swing area and the 100 day and 38.2% retracement would be needed to increase the bullish bias once again. Keep those levels in mind through the decision.
Drilling down to the hourly chart there are some closer resistance targets and downside targets as well.
The fall to the lows today extended toward the high of a swing area between 0.6303 and 0.6315. The low price today stalled at that area (see red numbered circle on the hourly chart). That area down to 0.6303 will be the close downside target to get to and through if the sellers are to take more control.
Stay below that level and traders will next target 0.6272 to 0.62796 (see green numbered circles). Just below that is the 50% of the move up from the July 14 low at 0.6263. Fall below that, and the door opens to the downside.
On the topside, the close targets to get to and through is the 200 hour MA at 0.6342 followed by the swing high from August 1 at 0.63515. Move and stay above that, and a move back toward the 100 hour MA and the 100 day MA would be in the cards.
