NZDUSD Nosedives As RBNZ Reduces Interest Rate
The New Zealand Dollar (NZD) fell broadly against the US Dollar (USD) on Thursday by more than 100 pips. The NZDUSD pair broke a couple of important support areas including the 100 simple moving average and a bullish trend line on the hourly chart.
RBNZ Cuts Rate
New Zealand’s central bank cut its benchmark interest rate on Thursday and signaled it may ease further as the economy softens amidst a sharp fall in export prices and a slowdown in earthquake reconstruction activity in Christchurch.
The Reserve Bank of New Zealand (RBNZ) cut its official cash rate (OCR) by 25 basis points to 2.75 percent as widely expected, delivering its third cut in as many policy reviews.
The pair traded as low as 0.6255, and currently making an attempt to correct higher. However, it might find resistance around the 38.2% Fib retracement level of the last drop from the 0.6424 high to 0.6255 low which is aligned with the 100 hourly SMA.
On the downside, an initial support area can be around the last low 0.6255. A break below it could take the pair towards the 0.6220 support area.