The NZDUSD pair has been on a downward trend since Wednesday last week. Today, the pair declined sharply after the decision by the central bank to cut interest rates. It reached a low of 0.6377, which was the lowest level since February 2016.
7 August 2019, OctaFX – The New Zealand dollar fell sharply after the central bank lowered interest rates by 50-basis points to 1.00%. This was a sharper cut than the 25-basis points that investors were expecting. The central bank attributed the interest cut to the ongoing uncertainties in the market about global trade.
Jacinda Arden, the country’s Prime Minister, welcomed the rate cut saying that it will help improve homeownership. Indeed, the four major banks slashed mortgage rates shortly after the rate cut was announced. The Australian dollar too moved sharply lower after the announcement.
NZDUSD technical analysis
On the daily chart below, the price is along the lower line of the 20-period Bollinger Bands while the 14-day RSI has moved deeper into the oversold zone. The price is below all the short, medium, and long-term moving averages. The momentum indicator has continued moving lower as shown below. The pair will likely continue moving lower to test the 63 cents level.
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