New Zealand Dollar faces increasing downside risks against US Dollar – Societe Generale

The RBNZ kept the OCR at 2.75%, against expectations of a 25bp rise, leaving NZD/USD testing the bottom of its multi-month range at 0.5560/0.5550, according to Societe Generale analysts. Although the central bank indicated that tighter policy is likely, a breach of this key support area could open the way to further declines towards 0.5480 and 0.5420. Any near-term recovery could face a ceiling at 0.5710.

NZD/USD tests key support zone

"RBNZ OCR on hold at 2.75%, vote 4-3, consensus was +25bp."

"The committee agreed that tighter monetary policy is likely to be required, depending on the economic outlook."

"NZD/USD is challenging the lower boundary of its multi-month range at 0.5560/0.5550, a crucial support zone."

"A short-term rebound cannot be ruled out; however, the recent pivot high at 0.5710 could act as resistance."

"If the pair fails to defend the support at 0.5560/0.5550, the risk of a deeper downtrend would increase."

"In such a scenario, the next objectives could be located at the April 2025 low near 0.5480 and projections at 0.5420."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)