While investors are expecting the New Zealand dollar to strengthen ahead of the New Zealand central bank meeting on Wednesday, the opposite happened when the value of the New Zealand dollar plunged in the Asian session this morning. What happened?
The situation of the fall in the value of the Kiwi dollar just now was driven by a reaction to the report of 1 Covid-19 case in Auckland, New Zealand. Ye right, just 1 case is enough to plunge the price.
Previously, New Zealand was one of the most successful countries in curbing the spread of Covdi-19 with the implementation of strict sanctions. 1 case in New Zealand is likely to expect slowing economic activity again if movement restrictions are again implemented in the country.
On the NZD/USD chart, the price plunged around 80 pips in the Asian session this morning to around the 0.69400 level continued at the beginning of the European session.
The lower price decline will continue towards the 0.69000 support zone which was previously tested in last July's trading.
A lower decline below that zone will record the latest lows for the year.
However, it is possible that prices could rebound again following the expectation that the outcome of the meeting by the Reserve Bank of New Zealand (RBNZ) will see an increase in interest rates.
The rebound will first test the resistance zone at 0.70000 before trying to pass the Moving Average 50 (MA50) barrier on the 1 hour time frame for a bullish signal again.
The continued rise will lead to the resistance zone at 0.707000 which prevented the price to higher levels in the last 2 weeks trading.
