NZD/USD Price Analysis: Declines towards 0.6100 as RBNZ looks back to policy easing

• NZD/USD has shown a pullback move to near 0.6147 after a three-day low of 0.6133, however, the downside seems favored.
• The RBNZ has considered the qualitative easing proposal amid lower risks to financial stability.
• NZD/USD witnessed a steep fall after a mean-reversion move to near the 50-period EMA around 0.6180.

The NZD/USD pair has displayed a pullback move to near 0.6147 after a three-day low of 0.6133 in the Tokyo session. The Kiwi asset might see a conclusion of pullback move sooner as the Reserve Bank of New Zealand’s (RBNZ) proposal to loosen the loan-to-value ratio (LVR) restrictions has delivered an approach of consideration of easing monetary policy.

RBNZ has considered the qualitative easing proposal citing that current restrictions may be unnecessarily reducing efficiency as risks to financial stability are lower.

The US Dollar Index (DXY) has shown some recovery after a corrective move to near 101.80. Pre-Federal Reserve (Fed) interest rate policy anxiety is kicking in and is improving the appeal for the US Dollar as a safe-haven asset.

NZD/USD witnessed a steep fall after a mean-reversion move to near the 50-period Exponential Moving Average (EMA) around 0.6180 on a four-hour scale. The Kiwi asset has continued its downside journey and is expected to meet critical supports placed at April 21 and March 08 low at 0.6126 and 0.6088 respectively.

A downside momentum will be triggered if the Relative Strength Index (RSI) (14) gets slipped into the bearish range of 20.00-40.00.

Going ahead, a breakdown of April 24 low at 0.6125 will drag the asset toward March 08 low at 0.6088 followed by the 15 Nov 2022 low at 0.6058.

Alternatively, an upside move above April 24 high at 0.6168 will drive the Kiwi asset toward the round-level resistance at 0.6200. A breach of the latter will allow the Kiwi to report a fresh weekly high above April 19 high at 0.6227.

NZD/USD four-hour chart