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- NZD/USD plunged after the RBNZ decided to hold OCR at 5.5%.
- A break below 0.6100 could lead the pair to navigate the region around the significant support of 0.6050 and February’s low at 0.6037.
- The immediate resistance appears around the 23.6% Fibonacci retracement level of 0.6124, followed by the significant barrier at 0.6150.
NZD/USD continues to decline for the fourth straight session on Wednesday, falling as low as 0.6110 during Asian trading hours. The Reserve Bank of New Zealand (RBNZ) agreed to maintain the Official Cash Rate (OCR) at 5.5% during its monetary policy meeting in February, which presents issues for the pair
At the psychological level of 0.6100, the NZD/USD pair is expected to find quick support. The pair may be under pressure to traverse the area around the primary support level of 0.6050, which is followed by February’s low at 0.6037 if they break below this psychological support.
The NZD/USD pair’s momentum appears to be shifting in favor of a bearish mood, according to the lagging indicator Moving Average Convergence Divergence, or MACD. Although it is above the centerline, the MACD line exhibits convergence above the signal line.
Furthermore, a bearish attitude is suggested by the technical analysis of the 14-day Relative Strength Index (RSI), which is below the 50 mark.
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The NZD/USD pair may encounter immediate resistance on the upside at the significant barrier at 0.6150, which is located around the 23.6% Fibonacci retracement level of 0.6124. If the pair breaks above this level, they may investigate the resistance area surrounding the psychological level of 0.6200 and the 38.2% Fibonacci retracement level of 0.6179.
The NZD/USD pair may continue to rise and reach its February high of 0.6219.
NZD/USD: Daily Chart
Conclusion
By combining a rigorous technical and fundamental analysis with a sound approach to risk management, traders can position themselves for success in the volatile forex markets. Keep a watchful eye on the NZD/USD pair as it navigates toward the critical psychological level of 0.6100, but always remember that trading involves risk. Every decision should be made based on a thorough understanding of the market and a well-defined strategy.
