- NZD/USD grinds lower around intraday low following PBOC rate cut.
- PBOC cuts 1-year LPR to 3.80%, keeps 5-year rate unchanged.
- Failures to cross 21-DMA, downbeat oscillators favor sellers.
NZD/USD remains pressured inside a 15-pip trading range around 0.6730 during early Monday. In doing so, the Kiwi pair justifies a surprise rate-cut announcement from New Zealand’s key customer China.
The PBOC announced a five basis points (bps) of a cut to the benchmark one-year Loan Prime Rate (LPR) top 3.80% while keeping the five-year rate intact around 4.65%.
Technically, the pair’s failure to cross the 21-DMA hurdle during the last week’s corrective pullback joins downbeat MACD and RSI conditions to weigh on the quote.
That said, the NZD/USD prices decline towards the retest of a descending support line from March, around 0.6700.
However, oversold RSI conditions hint at a bounce from the stated support line, a break of which will open doors for a downward trajectory towards the late 2020 bottom near 0.6590.
On the contrary, a clear upside break of 21-DMA level of 0.6820 will need validation from September’s low close to 0.6860 before recalling the NZD/USD bulls.
In a case where the pair remains firmer past 0.6860, odds of its run-up to early October swing high near 0.6985 can’t be ruled out.
NZD/USD: Daily chart
Trend: Further downside expected