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RBNZ decision preview: What to expect of NZD/USD

FXStreet (Córdoba) - The Reserve Bank of New Zealand (RBNZ) will announce its monetary policy at 20:00 GMT with consensus pointing for the third rate cut in 2015 in an environment of falling commodity prices.

The official cash rate (OCR) stands at 2.75% and the RBNZ is expected to announce a 25 bps cut to 2.50%. The bank lowered the rate in three occasions this year, in June, July and September.

However, analysts remain split and December is close call, so whatever the outcome, NZD crosses might experience sharp moves.

As for NZD/USD, the pair was trading little changed on the day around 0.6645/50 before the release. Kiwi is expected to fall sharply in the case of a cut, with next supports seen at 0.6547 (100-day SMA), 0.6500 (psychological level) and 0.6428 (Nov 18 low).

In case the RBNZ decides to keep policy rate unchanged, NZD/USD could see a relief rally, short-term resistances lining up at 0.6741 (Dec 8 high) and 0.6787 (Dec 7 high) ahead of 0.6847 (Oct 23 high).

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