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At the Forex currency market the New Zealand Dollar rate rises on Thursday, smoothing over some yesterday’s losses.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to go down, giving a pair sell signal. Stochastic Oscillator descends on Thursday, giving a similar signal. 

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.7230 the pair will go to 0.7250 and further to 0.7270. if the pair exceeded the level of 0.7155, targets for decline will be the levels of 0.7140 and 0.7110.

At the meeting last week the Reserve Bank of New Zealand decided to decrease interest rate by 50 basis points, to 2.50% per annum. Investors, who had predicted possible reduction of the indicator, ignored its decrease by 25 basis points.

Previous sales of the NZD were caused by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%; next meeting of the RBNZ is scheduled for 10 March. Politician does not rule out that effect of the earthquake which took place in the South of New Zealand in February can contribute to the rollback of the national economy into the state of recession.

Apparently, the RBNZ will start a new phase of monetary policy tightening soon.

The New Zealand Dollar still looks extremely weak after the falls both last week and this week, and developments in Japan as well as slow down of economy in China will prevent currency’s recovery even in part. The fact that investors continue to withdraw from risks is also disadvantageous for the NZD. 

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