NZD/USD - NZD/USD Jumped After The Cut of The Interest Rate - 08/11/2016 (GMT)

The Reserve Bank of New Zealand cut the official cash rate at a record low of 2.0% as expected and indicated that further reductions are likely to ensure the inflation level near the middle of the target range according to the RBNZ Governor Graeme Wheeler. The kiwi jumped after the announcement. The country’s inflation rate has been below RBNZ’s midpoint for more than four years now and in collaboration with the weak global inflation, the central bank judged that was essential to take measures. The 2% midpoint target is expected to be reached in the third quarter of 2018.

The NZD/USD pair surged more than 1.5% the last three days and recorded three positive candles in a row. The kiwi pair is looking much more bullish, following the aggressive pullback from the 0.7080 strong support level. During yesterday’s session, the pair surpassed our suggested entry level at 0.7215 and reached our targets at 0.7260 and then at 0.7320 resistance levels (see yesterday's technical analysis here: http://bit.ly/2bkpuDp). Today, the price started the day with a downward correction of the upside move and probably will retest the 0.7160 support barrier. Afterwards, our recommendation is a continuation of the upside potential move until the 0.7340 barrier. In addition, the MACD oscillator is rising in a positive path while the RSI indicator is sloping downwards but is still moving in a bullish area.