NZDUSD is under selling pressure for one more day as investors continue to shift their attention to USD safe-haven as the sell-off in global equities resumed today. The coronavirus outbreak uncertainty coincided with a slump in the New Zealand dollar. The Reserve Bank of New Zealand announced that it would conduct large-scale asset purchases of Government bonds (LSAP), following similar moves by the major global central banks.
The Monetary Policy Committee agreed that further monetary stimulus is needed to meet the inflation and employment targets amid the coronavirus spread. Risk aversion has caused a rise in interest rates on the long-term New Zealand government bonds and the cost of bank funding. The LSAP programme will purchase $30 billion of New Zealand government bonds, in different maturities, in the secondary market for the next 12 months.
NZDUSD is 1.22% lower at 0.5642 as the technical picture deteriorates, and lower levels might be on the cards. On the downside, intraday support stands at 0.5587. The next level to watch is 0.5467, the low from March 19. On the other side, initial resistance will be met at 0.5689, the daily high. The next resistance level stands at 0.5880, the high from Friday’s trading session. In case of a move higher, the next level to watch is at 0.5914, the high from March 19.