It was only a matter of time before the Reserve Bank of New Zealand follows suit with a dovish tilt. The central bank acknowledged rising risks to global growth, especially economic headwinds for its key partners Australia and China, as well as slowing domestic spending. In its statement, an interest cut has become more likely than ever. Though markets have anticipated the shift, investors were still surprised that the RBNZ would go down the easing path so soon.
On the technical side, NZDUSD slashed through the daily support of 0.6810. A short-term consolidation is likely before a new wave of selling pressure. 0.6750 would be the next target in the coming days.
The sentiment-price correlation chart shows the sentiment falling from its recent peak, which suggests that a potential reversal could be underway.