The Reserve Bank of New Zealand is set to announce its interest rate decision at 8 PM ET, with expectations leaning towards maintaining the current rate of 5.5% for the fourth consecutive meeting. Key levels to watch in the NZDUSD pair in relation to this decision are:
- The 200-day moving average and the 50% Fibonacci retracement of the decline from the July high, both converging at 0.6092. This level is crucial for determining the market’s direction, acting as a pivotal point for buyers and sellers.
- If the NZDUSD dips below 0.6092, it would indicate a shift in the technical bias towards the downside.
- Conversely, for a more bullish outlook, the next target is the 61.8% Fibonacci retracement of the same range, located at 0.6167. A break above this level would strengthen the bullish sentiment, encouraging traders to explore further upside potential.
- Maintaining a position above both the 200-day MA and the 50% retracement level (0.6092) is currently seen as a bullish indicator. Market participants will be closely monitoring any pullbacks to this area, potentially viewing dips as buying opportunities, with stop-loss orders likely placed below 0.6092.
- A successful breach above 0.6167 would open up more room for upward movement in the NZDUSD pair.
Overall, the market’s response to the Reserve Bank of New Zealand’s rate decision will be closely tied to these technical levels, with traders watching for either a continuation of the current bullish trend or a shift towards a bearish outlook based on the pair’s movement around these key levels.
This article was written by Greg Michalowski at www.forexlive.com. Source