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RBNZ Decision Pushed Quotes Upwards

11/23/2022 2:22 PM

The NZD/USD pair has continued to grow since the middle of last month, although recently the quotes have entered the range of 0.6100-0.6200. Today, the price has risen again to its upper limit against the background of an increase in the Reserve Bank of New Zealand (RBNZ) interest rate by 75.0 percentage points to 4.25%.

This decision caused the strengthening of the New Zealand currency, but further comments from the regulator disappointed investors: officials predicted a new peak rate of 5.50%, which is significantly higher than earlier expectations, while the pressure on the national economy should seriously intensify and lead it to recession, which will begin in Q2 2023 and last until early 2024. Only after that, the inflation indicators will be able to move steadily to the target level. In turn, New Zealand Finance Minister Grant Robertson said that the national economy will be able to withstand the risks of a global slowdown, but this rhetoric did not have a significant impact on the dynamics of the New Zealand dollar, and it still cannot break above the sideways range.

The uncertainty in the NZD/USD pair is also due to the expectation of today's publication of the minutes of the last meeting of the US Fed, which may contain hints of further actions of the regulator. The market is most interested in any information regarding the slowdown in the interest rate increase, the presence of which may lead to pressure on the position of the USD.

Technically, the resistance zone 0.6200-0.6225 is seen as the key for the "bulls", its breakout will give the prospect of further growth to the levels of 0.6347 (Murray level [8/8]) and 0.6469 (Murray level [+1/8]). The most important for the "bears" is the 0.5981 mark (the Murray level [5/8]), supported by the middle line of the Bollinger Bands. If consolidated below it, the price will return to the framework of the long-term descending channel and will be able to fall to the area of 0.5859 (Murray level [4/8]), 0.5737 (Murray level [3/8]).

Technical indicators confirm the continuation of the upward trend: the Bollinger Bands and the Stochastic are reversing upwards, the MACD histogram is increasing in the positive zone.

Resistance levels: 0.6200, 0.6225, 0.6347, 0.6469. | Support levels: 0.5981, 0.5859, 0.5737.

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