Dovish RBNZ slid the Kiwi to yearly lows

The decision of RBNZ to keep key interest rates at 1.75% led to depreciation of the New Zealand Dollar against its major rivals today. This was widely expected, but recently some positive economic numbers  were released, which supported the anticipation of rate hike. The unemployment rate dropped to 4.9% Q1 and CPI has marked 2,2% on year-on-year base for the 2016’s. In fact these hopes didn’t match the opinion of  Governor Wheeler, who thinks that no inflationary pressure is seen and salaries didn’t rise significantly. 

The dovish RBNZ smashed the NZD/USD pair and sent it to yearly low at 0.6718. 

The technical readings on the four-hour time frame are confirming the downtrend. The price crossed to below the 20-day SMA, which has turned to bearish mode. RSI and stochastic retreated from the extreme overbought area, but yet are well below their mid-lines and had lost directional strength. 

Meanwhile the pair surpassed the December 2016’s low at 0.6862 with current market price 0.6854. Apart of the posted yearly low this suggests further decline and bears are aiming to test the 0.6800 level.