• NZD/USD traders await the RBNZ for clarity.
• Should the RBNZ outcome be dovish, then this could lead to a hefty sell-off towards 0.5650 and then 0.5600.
• On a hawkish outcome, NZD/USD could head towards a 50% mean reversion of the daily bearish impulse near 0.5800 and beyond. 

The knee jerk to the RBA on Tuesday was a 50 pip sell-off before a 100 pip rally that was faded by the bears in London back to the post-RBA lows until the US dollar was sold off in New York. 

It is the Reserve Bank of New Zealand's turn today and NZD/USD was unable to benefit as well as its counterparts in Europe due to the Reserve Bank of Australia's dovish tilt. The kiwi moved higher but was little changed on the day despite softer US yields and a much weaker US dollar.

NZD/USD moved up from a low of 0.56795 to score a high of 0.5783. The bird has since fallen back to the middle of the range and idles in the 0.5720 awaiting the next catalyst. 

''The RBA’s surprise smaller 25bp hike yesterday has gotten FX markets wondering if the Reserve Bank of New Zealand might be the next central bank to slow the pace of tightening,'' analysts at ANZ Bank said.

''That and NZD/AUD relatives is weighing on the Kiwi this morning. Still, it won’t be long (2pm) before the RBNZ get the chance to make their views known. We expect a 50bp hike and hawkish tone, but the market is already pricing in a lot, so the bar is high.''

''While officials in Australia may be taking a more cautious approach we expect the RBNZ will lift the official cash rate by 50bps today. The Quarterly Survey of Business Opinion released by the NZIER yesterday shows inflationary pressures remain very strong.

Capacity pressures are only easing slowly and the labour market remains very tight. In this inflationary environment we see the RBNZ has little choice but to focus on dampening inflation pressures by delivering another 50bp rate hike,'' the analysts explained. 

NZD/USD technical analysis

The price is leaning over the top of a 100 pip box and resisted by the 0.5750s. Should the RBNZ outcome be dovish, then this could lead to a hefty sell-off towards the middle of the 100 pip box near 0.5650 and then 0.5600.

On the other hand, the price could shoot up on a hawkish outcome towards a 50% mean reversion of the daily bearish impulse near 0.5800 and beyond. 

The knee jerk to the RBA on Tuesday was a 50 pip sell-off before a 100 pip rally that was faded by the bears in London back to the post-RBA lows until the US dollar was sold off in New York.