NZD/USD consolidates RBNZ-led rally near 0.7270

The NZD/USD pair reverses almost half the RBNZ fuelled rally, although remains strongly bid as markets continue to digest only 25 bps rate cut delivered by the RBNZ earlier on the day.

NZD/USD hovers above daily R1 at 0.7271

Currently, the NZD/USD pair now gains +0.90% and trades at 0.7277, having found strong bids near 0.7270 region. The bulls appear to take breather after almost 250-pips knee-jerk rally, allowing a consolidation phase in the NZD/USD pair as dust settles over the RBNZ aftermath.

The NZD/USD pair rallied to the highest levels since May 2015 at 0.7343 after the RBNZ cut the key rate by 25bps to a new record low of 2.00%, although the central bank’s decision fell short of expectations (50bps expected), triggering an extensive rally in the major. Markets had priced-in a 50bps rate cut in light of sharp appreciation in the NZD.

With the RBNZ out of the way, markets now look forward to the Chinese dataflow and key US employment and retail sales data due in the upcoming sessions ahead.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7300 (round figure), above which it could extend gains to 0.7343 (multi-month high). To the downside immediate support might be located at 0.7214 (daily pivot) and from there to at 0.7181/80 (5 & 10-DMA).