Forex: NZD/USD loses over 1 cent as central bank views diverge

One of the most gripping contrasts in performances in the past 24 hours has been the Kiwi vs the Greenback, with the rate getting smashed almost 1.5 cents from high to lows (0.8470 to 0.8330), currently around 0.8350.

The less-dovish-than-expected FOMC coupled with threats of intervention by the RBNZ have favoured the aggresive sell-off in a pair which still maintain its broad 0.8290/0.83 - 0.8480/0.85 range.

Drilling down into low timeframes, the 30-minutes in particular, current price at 0.8360 is capped by a descending 20-EMA, which has previously acted as dynamic resistance on the upward correction in Europe, before the next round of selling.

Back to the RBNZ more aggressive language, Nomura Strategist Geoffrey Kendrick suspects the RBNZ intervention threat will be a false alarm, saying that “although this cannot be ruled out, we would agree with the Governor that intervention is unlikely to be successful, outside of an initial signaling impact.”