• NZD/USD is under pressure and taking the cross along for the ride despite the hawkish RBNZ.
• The fact that the central bank only raised by 50bps is pressuring the bird away from the knee-jerk highs.

The Reserve Bank of New Zealand has hiked 50 bps as expected and the market is now digesting the statement, and the committee considered whether to increase by 50 or 75bps at this meeting, concluding that it is appropriate to continue hiking at the current pace. 

The OCR is now at a seven-year high of 3.5% while the central bank flagged more to come as it struggles to contain stubbornly high inflation.

The board decided not to hike by 75bps, so while there was scope for the upside to 0.5800, the price may struggle to gain traction at this stage of the runnings as it crumbles away, especially on a resurgence in the greenback that is trying to base at the lows of the week so far:

NZD/USD M15

NZD/JPY M15

The price could be expected on NZD/JPY to crash into support near 82.30 and in doing so, it will be leaving last week's highs for dust and put a significant risk of a move lower for the rest of the week. Bears can eye a test of 81 the figure.