Insights 
VT 
Key Points
- NZD/USD rebounded from a low of 0.59208 to a high of 0.59795, with MACD showing strong bullish momentum and a decisive break above short-term resistance.
- RBNZ cut rates to 3.25%, but Governor Hawkesby’s dovish tone was offset by a signal that easing could pause, pushing 2-year swap rates 11 bps higher.
The New Zealand dollar staged a sharp intraday recovery on Wednesday, with NZD/USD bouncing off 0.59208 to reach 0.59795 following the Reserve Bank of New Zealand’s (RBNZ) decision to cut the official cash rate by 25 basis points to 3.25%. This move was widely expected, but it was the central bank’s tone that caught traders off guard.
Governor Christian Hawkesby struck a measured tone, reminding markets that the central bank had already delivered 225 bps of cumulative easing — and that these cuts would take time to flow through to the real economy. He noted that rates were now in neutral territory near 3.0%, and policy would be judged “meeting by meeting.”
Importantly, one committee member voted to leave rates unchanged — a rare dissent that added to the perception that the RBNZ may be nearing a pause. Markets recalibrated quickly. The odds of another cut in July dropped from 60% to 36%, according to swaps pricing. Meanwhile, two-year swap rates spiked 11 basis points to 3.230% as traders unwound overly dovish positioning.
This shift squeezed short Kiwi positions, and the NZD/USD pair responded with a strong bounce. With price now consolidating around 0.5966, bulls will be eyeing the seven-month high at 0.6031 as the next major hurdle. Immediate support rests at 0.5940, followed by the session low at 0.5920. Momentum remains bullish for now, with MACD expanding and the histogram pushing higher.
Technical Analysis
NZDUSD staged a sharp rebound from the session low of 0.59208, piercing through short-term resistance to reach a high of 0.59795. This recovery follows a sustained downtrend visible since the previous day, where price struggled below the 30-period moving average. The recent breakout now sees price trading firmly above all three moving averages (5, 10, 30), a bullish signal in the short term.
Picture: NZDUSD rebounds off 0.5920, surges through 0.5960 as MACD momentum builds; eyes on 0.5980 breakout, as seen on the VT Markets app
The MACD confirms momentum acceleration, with a strong crossover and widening gap between the signal and MACD lines, backed by rising green histogram bars. A retest of the 0.59800 zone could materialise if the pair holds above 0.59500. However, failure to extend this leg may see consolidation or a pullback toward 0.59400.
Cautious Outlook
The Kiwi’s bounce may extend in the near term if the USD softens further or if risk appetite improves. However, with global data still mixed and the RBNZ leaving the door open to future easing, traders should remain cautious. A break above 0.5980 could open the way toward 0.6030, while failure to hold above 0.5950 may see the pair revisit earlier lows.
