The New Zealand dollar plunged on Thursday and was seen 1.5% weaker during the London session, with the NZDUSD pair trading at fresh two and a half year lows around 0.6650.
As widely expected, the RBNZ left monetary policy unchanged and the official cash rate was kept at 1.75%.
In the forecasts, the RBNZ shifted out the projected timing of a rate rise from Q1 2020 to Q4 2020. The following commentary was dovish: “We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down.”” This was a big dovish message and the kiwi was sold-off aggressively afterward.
The resistance is now seen at May 2016 lows around 0.6685 and as long as the NZDUSD pair trades below, the outlook seems bearish. The next selling zone would be around 0.6730.
On the downside, bears could be targeting levels from February 2016 near 0.6570 and if these don’t hold, further decline toward the psychological level of 0.65 could occur.