As Reserve Bank of New Zealand (RBNZ) said it is prepared to cash rate further, other counterparts against NZD gained strength. The central bank said that a negative official cash rate (OCR), or benchmark interest rate, will become an option in the future. The central bank’s interest rate currently stands at 0.25%. QE program expanded from 30 NZD billion to 60 NZD billion which was expected. This added to create a bearish move for the pair.

NZD/JPY dropped 70 pips upon the release of RBNZ’s interest rate decision. With bearish momentum expanding, a breakdown in this currency pair is pending. If the bear trend continues we could see NZD/JPY breaking 64.827 (S1) and aim for next 64.563 (S2) and if the bull markets take over then we can expect it to break at 65.538 (R1) and aim for 65.985 (R2).

NZD/JPY 4 Hour Chart:

Support: 64.827 (S1), 64.563 (S2), 63.852 (S3).

Resistance: 65.538 (R1), 65.985 (R2), 66.696 (R3).

NZD/JPY opens up for negative rates making it favorable for a short position.