NZD/USD rallies on just a 25bp cut from RBNZ

As expacted, the RBNZ cut rates by 25bps to 2.00% and the bird has rallied given that some were expecting a 50bp cut to really signify the Central Banks lack of tolerance over the level of the currency.

The headlines also came in line with expectations and with what the RBNZ had voiced earlier in the year, that further policy easing may be needed. Here is a snapshot of those headlines: RBNZ: Cut rates by 25bps to 2.00% as expected

From here on, we are back to data from both the US and NZ in order to gauge when we might expect action from either the Fed or the RBNZ again. Nonfarm payrolls headline was strong for a second month in a row and has provided support for the troubled greenback against a back-drop of not so positive economic data releases or previous quarters with the GDP being revised down for both the last quarter of 2015 and first quarter of 2016. 

How volatile has NZD/USD been?

Hourly 2-Standard Deviation Volatility Bandwidth is currently 68 pips, and has been shrinking, while the ATR (14) is currently 21 pips. Daily 2-Standard Deviation Volatility Bandwidth is at 324 pips and shrinking. The average movement for the current hour has been for 21 pips per hour, over the last four weeks. Meanwhile, 1:00-2:00 GMT represented peak for volatility, with an average movement of 28 pips over the same period.

What price levels and patterns have to be considered?

With spot trading at 0.7289, we can see next resistance ahead at 0.7300 (Monthly High), 0.7307 (Annual High), 0.7307 (YTD High), 0.7310 (Weekly Classic R2) and 0.7342 (Daily High). Support below can be found at 0.7267 (Yesterday's High), 0.7266 (Daily Classic R3), 0.7227 (Weekly Classic R1), 0.7224 (Daily Classic R2) and 0.7211 (Hourly 20 EMA). 
Looking to candlestick patterns, we can see a Dark Cloud Cover formation on the 1-hour chart .