EURNZD Bounces from Key Support Level as NZD awaits RBNZ Rate Statement

The New Zealand Dollar has been on a bullish run for the last couple of months, which made the EURNZD bearish, as the Kiwi dollar determines the strength or weakness of this pair.

EURNZD reached the 1.9500 price level in March 2020, its highest price in ten years. Having reached its highest price in March 2020, EURNZD retraced sharply and started a bearish run at the end of the first quarter of 2020. On the other hand, NZDUSD touched its lowest price in ten years as well. The price of NZDUSD got to a 0.5600 price level in March 2020.

The Reserve Bank of New Zealand will announce its Rate statement for the third time this year on Wednesday, May 26. The rate has been kept unchanged at 0.25% since May 13, 2020, shortly after the Reserve Bank of New Zealand decided to cut the rate on March 15, 2020, from 1.00% to 0.25%. RBNZ was forced to cut the rate due to the impact of COVID-19 on the economy.

Technically, the price of EURNZD is still under the 200-day MA and the 50-day MA, but the 2019 demand zone has rejected the price more than once in the last few weeks. The price of EURNZD was first rejected from the 2019 demand zone in February, but the bears have not been able to get the price below that area since February. A break above the current price level will take the price

to the next resistance level, which is at 1.7250.

According to the last Commitment of Traders Report (COT), the non-commercials closed more long positions than short positions. They are generally closing their positions on NZD as they also await the Rate Statement.

A sudden change in the rate isnt expected as the economy is open and life has gone back to normal and lockdown has been eased. All hands on deck as we expect the rate statement.