How much longer can the kiwi sell off?

How much longer can the kiwi sell off?

On Wednesday, the Reserve Bank of New Zealand opted to maintain interest rates, coupling this decision with dovish remarks and forward guidance.

Danske Bank economists anticipate a continued decline in NZD/USD in the upcoming year, setting a 12-month target at 0.5700. They think that the RBNZ contrasts with other G10 central banks which are apparently eyeing the start of their respective rate cutting cycles (which might be news to you, considering most expectations for rate cuts from other central banks are repeatedly being pushed back).

Nevertheless, this sentiment led to a significant decline in the New Zealand dollar over the past two days, although it seems to be trying to find support.

The 100 and 200-day simple moving averages emerge as notable hurdles for bearish sentiment on the daily chart.

On the 4-hour chart, the next support level following these moving averages is at 0.6050, a critical level that previously served as resistance in October last year.

Sustaining levels above 0.6070 could help sustain a positive outlook with the next target possibly around 0.6140, supported by signals from the RSI.