Baxia Markets
May 22, 2024

Bullish Signals for NZDUSD Following RBNZ’s Steady Rate Decision

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NZDUSD experienced a significant spike, rising by almost 50 pips, following the Reserve Bank of New Zealand’s (RBNZ) announcement to keep the interest rate unchanged at 5.50%. This decision, consistent with market expectations, initially triggered a bullish reaction. However, the market quickly retraced, erasing over 50% of the initial gains.


The spike in NZDUSD came immediately after the RBNZ's interest rate decision, reflecting traders' initial bullish sentiment. The RBNZ Governor Adrian Orr's subsequent press conference, where he read prepared remarks on the policy statement and answered media questions, added to the market's volatility.Bullish Signals for NZDUSD Following RBNZ’s Steady Rate Decision


On the 1-hour chart, the initial spike broke above the Ichimoku cloud, a key indicator of bullish momentum. The RSI oscillator also reached the overbought zone, suggesting that the upward movement was strong. As long as the market stays above the EMA 200 and the RSI does not enter the oversold territory, the bullish sentiment is likely to remain intact.


The EMA 50 is currently positioned above the EMA 200, which typically signals a bullish trend. This alignment supports the view that the recent upward movement could have further room to run. Additionally, the Ichimoku lines – Tenkan-sen (conversion line), Kijun-sen (baseline), and Chikou span (lagging span) – are all positioned above the cloud. This configuration reinforces the bullish outlook suggested by the EMA alignment.


Despite the retracement following the initial spike, the overall sentiment for NZDUSD remains bullish. The key technical indicators on the 1-hour chart support this view. However, traders should remain cautious and watch for any breaks below the EMA 200 or signs of the RSI moving into the oversold zone, which could indicate a potential shift in market sentiment.


NZDUSD's reaction to the RBNZ's interest rate decision underscores the current bullish sentiment in the market. The initial spike and subsequent retracement highlight the importance of technical indicators in gauging market trends. As long as the key support levels hold, the bullish trend is likely to continue. Traders should closely monitor the EMA 200 and RSI levels to anticipate any potential shifts in market dynamics.



Key Economic Releases to Watch Today

NZD, RBNZ Interest Rate Decision

Forecast 5.50% vs Previous 5.50%


Forecast 2.1% vs Previous 3.2%

USD, Existing Home Sales (Apr)

Forecast 4.21M vs Previous 4.19M

OIL,Crude Oil Inventories

Forecast -2.400 vs Previous -2.508M



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