The NZD/USD currency pair experienced an upward movement on Thursday, recovering from a significant 1.4% drop the previous day. This rebound followed a dovish stance from the Reserve Bank of New Zealand (RBNZ), which decided to maintain its official cash rate (OCR) at 2.25% during its recent meeting.
The RBNZ”s commitment to an accommodative monetary policy aims to support economic recovery. However, the revised OCR track suggests that the next adjustment in interest rates may be upward, with expectations that such a move could occur by the end of the year.
In the aftermath of the RBNZ”s decision, market participants have moderated their expectations for immediate rate hikes, pushing the timeline for policy tightening further into late 2026. Karen Silk, the Assistant Governor of the RBNZ, indicated on Thursday that while the next interest rate move is likely to be an increase, uncertainties surrounding inflation and consumer demand still pose risks on both sides.
Currently, immediate resistance for NZD/USD is identified at 0.5998, which corresponds to the 38.2% Fibonacci retracement level. A close above this resistance could propel the pair towards 0.6051, marking the high observed on February 18th. Conversely, support is established at 0.5941, aligned with the lower Bollinger Band, and a break below this level may lead the pair to test 0.5918, which represents the 50% Fibonacci level.
In light of these developments, a buying opportunity around 0.5960 is recommended, with a stop loss set at 0.5900 and a target price of 0.6060. Traders should remain vigilant as the market navigates the implications of the RBNZ”s monetary policy stance.
