The Kiwi/Bird/New Zealand Dollar dipped against the USD to 0.6075 from 0.6088 yesterday ahead of today’s RBNZ interest rate decision. New Zealand’s central bank likely to leave its Official Cash Rate unchanged at 0.25%. Traders are focussed on the RBNZ’s Quantitative Easing program as well as forward guidance on interest rates. Traders will be looking at the RBNZ’s language. Any mention of negative rates from Governor Graeme Orr and his colleagues will weigh on the Kiwi. In April Orr said that negative rates are not ruled out and they will be thinking about additional stimulus.
With New Zealand about to end its lockdown having just opened businesses and schools, the RBNZ will refrain from easing but keep the door open.
In this case, the Kiwi should hold on to its gains. NZD/USD has immediate support at 0.6040 followed by 0.6010. Immediate resistance can be found at 0.6120 followed by 0.6170. The latest COT report saw a modest increase in NZD short bets to -NZD 14,953 contracts from the previous week’s -NZD 13,799., which is 35% of the year’s highs. Which says there are no big positions currently. Look for consolidation in a wider 0.6000-0.6200 range, trade both sides at the extremes is the best strategy.