NZD/USD Price Analysis: NZD is in consolidation mode ahead of the RBNZ meeting later

• NZD/USD is trading just under flat on Tuesday ahead of the RBNZ rate decision.
• The pair has found some intraday support at 0.6575. 

NZD/USD 4-hour chart

NZD/USD has moved sideways ahead of the RBNZ rate decision overnight (London time). There is not expected to be any changes in the main interest rate but the RBNZ could readjust their QE program. The NZD trade-weighted index (general strength of NZD) is very high and the central bank may be looking to address this situation as it could cause issues with inducing inflation. Just today it was announced that the region has reported its first set of COVID-19 cases in 102 days and the uncertainty this brings could be used as an excuse to act.

Looking closer at the chart, the price is resting on the red support area at 0.6575. If this level does end up breaking the NZD bears could be looking to target the blue horizontal line at the psychological 0.65 mark. Since the textbook trendline break and retest the price has been looking to move lower and maybe we could see more bearishness overnight. The main low on the chart stands at the consolidation low near 0.6393 and if this breaks the pair could be in freefall. 

The indicators are looking bearish too. The MACD histogram is under the zero-line and the signal lines are also pointing south. The Relative Strength Index is well under the 50 area and there is still space to move to the oversold area. 

Overall, the price has been in an uptrend for a while. This move lower could be some profit-taking or risk reduction leading into the RBNZ meeting. If the central bank add to QE aggressively then the price might just head towards some of the other major support areas.

Additional levels