When New Zealand released their December quarterly GDP report and revealed that domestic demand was strong, with inflation expectations holding just above 2%, Governor Orr stated the official cash rate would not change through through 2019 and 2020.
Thus, the Markets were looking for the RBNZ to hold the official cash rate (OCR) at 1.75% with a slightly dovish shift in their rate statement yesterday to confirm expectations of a rate cut in November or early 2020.
Well, yesterday the Reserve Bank of New Zealand (RBNZ) kept rates unchanged, but said the next rate move will likely be on the downside. RBNZ also said that balance to inflation risks has shifted to the downside and the core consumer price inflation target of 2% remains elusive.
This was slight more dovish than the Markets were anticipating and the New Zealand Dollar quickly went down 100 ticks in minutes.
So will the blood bath continue for the New Zealand Dollar over did the Markets overreact, lets go to the charts to find out.
Monthly Chart (Curve Timeframe) – monthly supply is at 0.7600 and monthly demand is at 0.6300
Weekly Chart (Trend Timeframe) – the trend is sideways.
Daily Chart (Entry) – the price action is showing a bullish ascending triangle. So potentially the downside is limited. There is no trade set-up at the moment. If you are a support / resistance trader, an opportunity was just missed to the downside However, the China -US trade talks resuming later this week and I’m sure will be the catalyst for the next set-up.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.