NZD/USD holds daily losses after RBNZ’s Orr words

• NZD/USD declines over 1%, and bullish momentum fades after RBNZ’s dovish outlook.
• RBNZ’s Orr was on the wires after the decision but didn't provide new insights.
• The fact that the bank considered a 50 bps cut earlier in the session made the NZD lose interest.

In Wednesday's session, the NZD/USD pair declined by 1.30% just below 0.6000 after the Reserve Bank of New Zealand’s decision during the Asian session. Governor Orr was on the wires entering Thursday’s Asian session but didn’t provide any new insights.

In Wednesday’s Asian session, the Reserve Bank of New Zealand (RBNZ) surprised the markets by not only cutting interest rates by 25 basis points but also revealing that a 50 basis point cut was seriously considered. The RBNZ explained that the economy had slowed more than anticipated and that their inflation assessment was largely based on expectations, which had already fallen back to the 1-3% target range.

NZD/USD technical analysis

The Relative Strength Index (RSI) is currently around 50, indicating that the market is in a neutral zone. The Moving Average Convergence Divergence (MACD) is showing decreasing green bars, signaling decreasing bullish momentum. This suggests that the selling pressure is increasing and a potential reversal could be on the horizon.

NZD/USD daily chart

On the daily chart, the NZD/USD pair is facing immediate support at 0.6000. A break below this level could open the door for a deeper correction towards 0.5970 and 0.5930. On the upside, resistance lies at 0.6040 and 0.6090 at the 100 and 200-day SMAs.

In the near term, the NZD/USD pair is expected to remain under bearish pressure. The technical indicators suggest that the bears are gaining the upper hand and could push the pair lower in the coming sessions. Any fundamental reasons that may fuel dovish bets on the RBNZ could trigger another downwards leg.