NZD/USD Price Analysis: Kiwi still looks pretty soft after last nights RBNZ QE announcement

• NZD/USD is now back to 0.02% after trading lower overnight.
• Although the price has recovered NZD looks like it could confirm the bearish reversal first.

NZD/USD 4-hour chart

Overnight the RBNZ announced that they would be extending their Large Scale Asset purchases to June 2022 to a maximum of NZD 100bln. Some analysts had projected slightly less but the increase was on the cards. Importantly they also added they see no immediate need to pursue alternative options right now, but a lower or negative OCR. This means that negative interest rates are in the works and the RBNZ will join the BoJ, SNB and ECB.

The chart is looking pretty bearish at the moment. the price has made two consecutive lower high waves and 0.6620 has been used as a resistance zone to good effect. The main area that would confirm a trend change is a break of the blue line at 0.6532. The black trendline on the chart has already broken to the downside and there has also been a retest. This is a textbook move and supports the theory that the price could continue to move lower.

The indicators are both still bearish too. The Relative Strength Index is under the 50 level and there is room to move lower. The MACD histogram is red and the signal lines are under the midpoint.

Overall, on the higher timeframes, the trend is still up. Although there has been a rejection of the lows the price could still take another bearish turn this week. Keep an eye on the blue support area as a break of this line could a good bearish confirmation.

Additional levels