The Reserve Bank of New Zealand has acted in the market today as it slashed the Official Cash Rate (OCR) from 2.50% to 2.25% in a rather exciting turn of events for NZD traders. For many out there this had been anticipated for some time, as weak economic data and flat commodity prices, especially in the milk sector caused stress on the NZ economy. And with inflation data remaining quite depressed it enabled the RBNZ to finally slash interest rates and send a strong message to the market at present. I had previously been talking about the prospects of such action, and this is a strong signal when it comes to monetary policy from the RBNZ that it wants to tackle the issues at hand with the NZ economy. Obviously the statement after the cut was that they would only act on more data, but at present it would seem that we may see a depressed economy for some time yet given the woes in China and in Australia which are New Zealand's two largest trading partners.

On the charts the NZDUSD slipped more than a cent as a result of the announcement enabling it to pull back from its recent highs and undo a lot of last week's bullish movements. However, there is still a strong bullish trend line in play on the daily chart and many will be looking to see now how long the trend line can hold, as a breakthrough here would signal to the bears that the NZDUSD is ripe for the picking. Additionally, just below this level we have the 50 day moving average, but previously traders have been hit and miss when it comes to respecting this key level and I would not be surprised for them to ignore it all together if we saw strong selling pressure.

Oil (WTI) has also been  a big mover on the charts as while surpluses looked to be lifting in the US market, we also had gasoline inventories being drawn down more than expected. But while all of this is happening it's the technical traders who are so far dominating the oil market and they have been causing all sorts of issues as they look to end the bearish run once and for all.

On the charts for oil we have seen some very strong buying pressure on the 38.05 level at this stage, and this is looking like they key level to beat. What also makes this strong as that it is also a 50 fib level and so the market is really struggling to crack through here from a technical perspective. Certainly if we did see a push through here we could see a large run for oil and resistance at 40.12 would most likely be the next target for oil traders.

Lastly, the S&P 500 is currently playing very much the technical game as it gets squeezed in a tight bullish wedge pattern. This looks unsustainable in the short term so many traders may be looking to play of this key area now and for many out there it is one I would certainly watch on the daily charts. 

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