The New Zealand dollar is known in the forex world after its national icon, the flightless bird called the Kiwi, which is also pictured on the country’s $1 coin.
The Kiwi remains under pressure as lingering U.S.-China trade tensions continue to weigh on sentiment. The Reserve Bank of New Zealand has already cut interests rate twice this year and Bearish traders were betting on another ¼ point cut this earlier this week. But the news that came out this week, even shock the Bears.
The New Zealand Dollar was crushed Wednesday after the Reserve Bank of New Zealand (RBNZ) slashed its interest rate further than markets expected and gave guidance that was more ‘dovish’ than anticipated, but analysts say there’s more losses ahead because the bank is likely to cut again before long.
The Reserve Bank of New Zealand cut its interest rate by 50 basis points to a new record low of 1.25% Wednesday when financial markets had looked for only a 25 basis point reduction, taking the market by surprise and prompting traders to dump the Kiwi currency by the bucketload.
Reserve Bank Governor Adrian Orr hinted at further easing by any means necessary in order to hit their inflation rate targets. Based on where I think the global economy is headed over the coming 12-24 months, I’m personally bearish as well on the Kiwi.
On the monthly chart, there is a nice head and shoulder pattern.
So based on a measured move, price could go sub .5000, which is an extreme.
So I will settle for distance that is half the measured move, but at the moment, on a smaller time frame, I can find a level to enter to go short.
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.
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