RBNZ (un)expectedly cut its Official Cash Rate overnight to 3.25% from 3.50%, citing risks to inflation and demand outlooks. It appears that the bank entered an easing cycle, although they've said that further decisions will be data dependant.

Kiwi gapped more than 150 pips as the data were released in the most illiquid time of the day. After an unconvincing bounce, the pair continued lower and is currently attempting to sustain a break below the big 0.70 level. Below there, the next stronger support level may come around 38.2% retracement of the 2000 to 2011 uptrend and the August 2010 low near 0.6950.

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