Trade the Kiwi on the RBNZ Interest Rate Decision

Kiwi dollar traders are bracing for another busy session ahead as the market prepares for a lively rate call from the Reserve Bank of New Zealand today, with opinions split on how much of a cut they will deliver to the market. The market is divided on whether they will opt for a 50-basis point cut or go for a larger 75-basis point reduction, with 60% pricing in the chance of the former. Inflation has pulled back to 2.2% in the last quarter and is now within the target band for the bank, but GDP prints are weak, and that’s why some are calling for a more aggressive 75-point cut, especially with the next meeting not coming until February 2025.

The Kiwi dollar is sitting just north of recent annual lows, and a more aggressive cut will see these lows taken out swiftly, opening the way for a move down to challenge the longer-term support level on the daily chart around 0.5550. The smaller cut could see a bit of a relief rally, but given the recent move down in line with the stronger US dollar, most traders are expecting topside moves to be limited.

Resistance 2: 0.6328 – Long-Term Trendline Resistance
Resistance 1: 0.6066 – 200-Day Moving Average

Support 1: 0.5795 – 2024 Low & Trendline Support
Support 2: 0.5550 – Long-Term Trendline Support

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