The New Zealand dollar weakened after the Reserve Bank of New Zealand signaled an expansionary monetary policy, exceeding the expectations of hawkish investors

NZDUSD at the basic level

The New Zealand dollar fell 1% against the US dollar, trading below 0.6000, after the central bank kept interest rates unchanged and indicated that monetary policy would likely remain expansionary for some time, with a possible rate hike later this year.

This policy aims to support the economic recovery, which has been uneven across sectors and regions.

However, the Reserve Bank of New Zealand's projections suggest a possible quarter-point rate hike later this year.

But officials remain cautious about the timing of any tapering of the stimulus package. The bank projected that average interest rates would reach 2.4% in the final quarter of the year, up from 2.3% previously, and 2.5% in the first quarter of 2027.

Markets had anticipated a more hawkish outlook and reacted by reducing the probability of a first rate hike before October to 70%.

NZDUSD at Technical Analysis

The NZD/USD pair declined today, Wednesday, from around 0.6050 to below 0.6000 following the Reserve Bank of New Zealand's decision. The pair completed a Bat harmonic pattern near 0.6090.

Currently, we still expect further declines towards the support level of 0.5930, then the uptrend level at 0.5855, and finally to the demand level where the four-hour harmonic pattern is completed near 0.5760/40.

It is advisable to wait for any corrective upward movement to enter a sell position to minimize stop-losses.

The best selling zones are near the 0.6000 to 0.6025 levels.

This scenario will be invalidated if the price breaks below 0.6125.