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RBNZ Statement - NZD/USD Reaction

The Reserve Bank of New Zealand raised the overnight cash rate (OCR) from 2.75% to 3.0%. This is the second rate hike in a row after the bank raised it from 2.50% to 2.75% in March, breaking a long hold at 2.50% since March 2011.

(Graem Wheeler)

Inflationary pressure was a key factor as RBNZ governor Graem Wheeler noted:
"...inflationary pressures are increasing and are expected to continue doing so over the next two years. In this environment it is important that inflation expectations remain contained. To achieve this it is necessary to raise interest rates towards a level at which they are no longer adding to demand..."

Trader's bought up the NZD/USD after the release, signaling bullish continuation after a bearish correction the previous 2 weeks. 

(nzdusd 4h chart, 4/24)

After finding support at 0.8553 last week, the NZD/USD consolidated and showed some bullish sign this week when breaking above a falling wedge. 

Price tested that bottom again ahead of the RBNZ statement, but decidedly rallied after the bank statement. This is a bullish signal and the next resistance levels in the near and short-term are:
0.8744 (2014-high)