NZDUSD TECHNICAL ANALYSIS - MARKET AWAITS RBNZ STATEMENT

The Reserve Bank of New Zealand will be releasing their interest on Wednesday, 24th of Nov. 2021. That will be the seventh and the last time this data will be released this year, according to data received from Forexfactory. As the year comes to an end, RBNZ will release their interest to show how well the economy has performed post-pandemic. An increase in the interest rate signifies that the economy is doing great, thereby strengthening the NZD currency.

RBNZ increased the interest rate from 0.25% to 0.5% last October, and it is expected to increase it further this week. The recent increase in the interest rate was a result of the economy that was reopened after the pandemic. The rate was kept unchanged at 0.25% for most of 2020. It was the same until recently when it was increased to 0.5% from 0.25%.

Data from Forexfactory indicates that the interest rate is expected to be 0.75%, an increase to the 0.5% that was released in October.

The NZD currency has been gaining strength in the market recently. As seen on the chart below, buyers are stepping in with a lot of strength as price forms a higher-low sequence. A higher-low sequence in the market is a sign that the uptrend is resuming.

The price of NZDUSD picked a support at 0.68000 area in August as the price retraced deeply. Buyers stepped in strongly and the price rallied to 0.7150 before sellers came in again. Price formed its first higher-low at 0.68590 area, above the support level where price rallied. That was in September. The price of NZDUSD reached a high of 0.72000 before the recent pullback, which is currently going into a range as the pullback slows down. NZDUSD is forming its second higher-low in two months as the price is coming to a halt at 0.69800 support level. A strong buyers'/bulls' reaction from here will indicate that the major trend is still active and the price will possibly rise back to its October high at 0.72000.

If the interest rate is increased or left unchanged, the price of NZDUSD will resume its original uptrend, but a sudden decrease in the interest rate will push the price of NZDUSD lower.