Date | Rate | Change |
---|
The NZD/USD pair attracts some dip-buying during the Asian session on Wednesday and might now be looking to build on the overnight recovery move from levels just below mid-0.5900s, or the YTD low. Spot prices currently trade near the top end of the daily range, around the 0.5970-0.5975 region, and remain at the mercy of the US Dollar (USD) price dynamics.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, drift lower for the second successive day and moves away from its highest level since February 14, which, in turn, is seen acting as a tailwind for the NZD/USD pair. That said, reduced bets for rate cuts by the Federal Reserve (Fed) should help limit any meaningful downside for the Greenback and keep a lid on any further gains for the currency pair.
Data released this week showed that the US manufacturing sector expanded in March for the first time since September 2022 and that demand for labor remains elevated. Adding to this, comments by a slew of influential FOMC members raised doubts over whether the Fed will cut interest rates three times this year. The current market pricing points to a total of 65 basis points (bps) rate cut for 2024, lower than the central bank's projected 75 bps.
Meanwhile, the shift in expectations pushed the yield on the benchmark 10-year US government bond to a four-month high. This, along with a generally weaker tone around the equity markets, supports prospects for the emergence of some dip-buying around the safe-haven buck and caps the upside for the risk-sensitive Kiwi. Hence, it will be prudent to wait for strong follow-through buying before confirming that the NZD/USD pair has bottomed out.
Market participants now look forward to the US economic docket – featuring the release of the ADP report on private-sector employment and ISM Services PMI. Apart from this, traders will take cues from speeches by FOMC members, including Fed Chair Jerome Powell. This, along with the US bond yields and the broader risk sentiment, will drive the USD demand and contribute to producing short-term trading opportunities around the NZD/USD pair.
The NZD/USD pair is currently trading at 0.5965, with a marginal gain of 0.13%. Despite these slight gains, the pairing continues to illustrate an overall bearish sentiment, with the selling force maintaining dominance over the market trend. On the shorter timeframes, a light of hope emerged ahead of the Asian session.
On the daily chart, the technical outlook for the NZD/USD pair is primarily bearish. The Relative Strength Index (RSI) remains in negative territory, with the latest reading at 36, flirting with the oversold threshold, indicating a steady dominance by sellers in the market. Meanwhile, the Moving Average Convergence Divergence (MACD) supports this negativity with decreasing red bars, suggesting strengthening downward momentum.
In contrast, the hourly chart provides a somewhat different perspective. The latest RSI reading leaned towards positive territory at 60 while the hourly MACD affirms this with rising green bars, showing short-term positive momentum.
The inspection of the broader outlook reveals that the NZD/USD shows a bearish trend, given its position relative to its Simple Moving Averages (SMAs). The pair is below the 20-day, 100-day, and 200-day SMAs, indicating sustained downward bias in both the short-term and long-term contexts. Furthermore, the bearish crossover of the 20 and 200-day SMAs at the 0.6070 level suggests a persistent and significant downtrend is foreseeable, also endorsing the negative outlook.
In conclusion, while the daily chart illustrates a flattened negative trend, the oscillations on the hourly chart offer short-term trading nuances. Overall, the NZD/USD is primarily bearish, with a key focus on the 0.6070 SMA crossover which points for further confirmation of the downtrend.
NZD/USD is falling in a bearish three-wave pattern, known as a Measured Move. This type of pattern consists of three waves, usually labeled ABC, in which wave A and C are commonly of the same length – or related by a Fibonacci ratio.
New Zealand Dollar versus US Dollar: Daily chart
Assuming the pattern unfolds as expected, NZD/USD is likely to fall to a target at roughly 0.5847, corresponding to the end of wave C.
NZD/USD has already broken below the conservative target for the pattern at 0.5988, measured as wave C being equal to a 0.618 Fibonacci ratio of wave A.
The pair is in a short-term downtrend which, according to the adage that “the trend is your friend,” is likely to continue.
The Relative Strength Index (RSI) momentum indicator, fixed at 29.32 on Monday’s close, is oversold which means there is now a risk of a pullback occurring.
If the RSI exits oversold it will signal the price will probably rise and traders should close their short bets and open longs.
If the RSI remains below 30 in the oversold zone it will signal traders should keep their short bets open but not add to them.
The NZD/USD pair oscillates in a narrow trading band during the Asian session on Tuesday and consolidates its recent losses to the lowest level since November 14 touched the previous day. Spot prices hold steady around mid-0.5900s and seem vulnerable to prolonging a multi-week-old descending trend.
The US Dollar (USD) stands tall near its highest level since February 2024 touched in the aftermath of the upbeat US data on Monday, showing that the manufacturing sector registered growth in March for the first time since September 2022. The US ISM Manufacturing PMI increased to 50.3 in March from 47.8 in the previous month to end 16 straight months of contraction. This forced investors to trim their bets that the Federal Reserve (Fed) will start cutting interest rates in June, triggering a fresh leg up in the US Treasury bond yields and underpinning the buck.
In fact, the yield on the rate-sensitive two-year and the benchmark 10-year US government bonds climbed to a two-week peak, which, along with the risk-off impulse, should benefit the safe-haven Greenback and drive flows away from the risk-sensitive Kiwi. The NZD/USD pair, meanwhile, fails to gain any respite from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr's comments, saying that the MPC remains laser-focused on its job to control inflation. Orr added that the central bank is on track to getting inflation back into the target band.
Market participants now look to the US economic docket – featuring the release of JOLTS Job Openings and Factory Orders – for some impetus later during the early North American session. This, along with speeches by influential FOMC members, the US bond yields and the broader risk sentiment, might influence the USD price dynamics and produce short-term opportunities around the NZD/USD pair. Nevertheless, the aforementioned fundamental backdrop favours bearish traders and suggests that the path of least resistance for spot prices is to the downside.
The NZD/USD pair is currently trading at 0.5950, showing a 0.50% decrease in the session. Sellers maintain control as the broader outlook remains bearish. However, some signs of a mild bullish reversal are emerging.
On the daily chart, the Relative Strength Index (RSI) value reveals a continuation of the negative trend. This suggests dominant selling conditions for this pair, signaling a possible oversold market soon. Conversely, the steady red bars of the Moving Average Convergence Divergence (MACD) also support this negative momentum.
When examining the hourly chart, the RSI values largely stay within the negative zone, echoing the daily chart's sentiment. However, the most recent RSI reading at 41 shows a minor increase, which could suggest a glimmer of a short-term bullish reversal after the index fell below 30 earlier in the session. Even though the corresponding MACD bars remain red, additional upward movements could be seen ahead of the Asian session.
Upon inspecting the broader outlook, the NZD/USD is demonstrating bearish signals across all periods examined. In addition, the pair’s position below the 20, 100-day, and 200-day Simple Moving Averages (SMAs), implies a forecast of negative momentum in the short term. This downward trend is further confirmed by the potential bearish SMA crossover of 20 and 200-day SMAs at 0.6070. However, as the daily indicators enter oversold conditions, a corrective bullish reversal shouldn’t be taken off the table.
The NZD/USD pair remains under some selling pressure near 0.5970 after retracing from the 0.6000 barrier during the Asian session on Friday. The dovish comments from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr weigh on the New Zealand Dollar (NZD). Investors await the release of US February Personal Consumption Expenditures (PCE) data on Friday for fresh catalysts.
The US economy expanded faster than expected in the fourth quarter (Q4), owing to robust consumer spending and corporate investment, according to the third estimate released by the Bureau of Economic Analysis on Thursday. The final US Gross Domestic Product (GDP) for Q4 grew at an annual rate of 3.4% from the previous 3.2% estimate. The US Dollar (USD) edges higher following the stronger-than-expected data.
On the Kiwi front, the RBNZ Governor Orr said the central bank is on track to getting inflation back into the target band while adding that interest rates have peaked and cuts are getting closer. The RBNZ indicated that it may cut rates from early next year. However, investors have priced in cuts from August this year. This, in turn, drags the NZD lower and acts as a headwind for the NZD/USD pair.
The US Core PCE data will be released later on Friday, which is estimated to show an increase of 0.3% MoM and 0.8% YoY in February. If the report showed firmer readings, this could boost the USD. The Fed’s Chair Jerome Powell and Fed Bank of San Francisco President Mary Daly are set to speak later on Friday.
The NZD/USD is currently traded at 0.5977, reflecting a decrease of 0.43%. The pair's movement was influenced by somewhat dovish comments from the Reserve Bank of New Zealand (RBNZ) Governor Orr and by mixed data from the US. Ahead of Friday’s session, markets await Personal Consumption Expenditures (PCE) data from the US from February.
RBNZ Governor Orr commented that inflation is normalizing while aggregate demand is slowing which would lead to a low and stable inflation on the horizon in hand with normalized interest rates. As a reaction markets are betting on 75 bps of easing in 2024, while the RBNZ hinted that the first cut would come in 2025 and as long as markets underestimate the bank, the NZD may suffer additional losses.
On the USD side, The recent release of Initial Jobless Claims data showed figures slightly below the consensus, with 210K reported against the anticipated 215K for the week ending on March 23. Additionally, the Q4 Gross Domestic Product (GDP) was revised upwards, showcasing a yearly growth of 3.4%. However, not all economic indicators were positive; the March Chicago Purchasing Managers Index (PMI) data from the Institute for Supply Management fell short of expectations, coming in at 41.4 against the forecasted 46 and previous 44.
Regarding the Federal Reserve (Fed) expectations, the probability of a rate cut in June has decreased to 66% from 85% earlier in the week, providing some support to the Greenback. That being said, the release of the headline Personal Consumption Expenditures (PCE) on Friday, will likely fuel volatility markets as investors may readjust their bets on the Fed.
On the daily chart, the NZD/USD pair's Relative Strength Index (RSI) is notably fixated within negative territory. The latest RSI reading swings back to a negative trend, marking a score of 33 which suggests a strong bearish sentiment in the market. Concurrently, the Moving Average Convergence Divergence (MACD) histogram prints red bars, evidencing a negative momentum that further reinforces the downward pressure on this currency pair.
Moving to the Simple Moving Average (SMA) analysis, the pair is trading below the respective 20, 100, and 200-day Simple Moving Averages (SMAs), supporting the continuing negative trend.
The NZD/USD pair comes under heavy selling pressure on Thursday and continues losing ground through the first half of the European session. The downward trajectory drags spot prices to the 0.5970-0.5965 region, or the lowest level since November 17, and is sponsored by a combination of factors.
The New Zealand Dollar (NZD) weakens after the business outlook survey by ANZ Bank showed weakening activity indicators and a slight fall in inflation pressures. Moreover, markets are pricing in an almost 50% chance the Reserve Bank of New Zealand (RBNZ) could cut rates as early as July. This, along with a fresh bout of the US Dollar (USD) buying, turn out to be key factors exerting downward pressure on the NZD/USD pair.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, climbs to over a one-month peak in the wake of Federal Reserve (Fed) Governor Christopher Waller's hawkish comments on Wednesday, which tempered rate cut bets. This remains supportive of elevated US Treasury bond yields, which, along with a softer risk tone, is seen benefitting the safe-haven buck and driving flows away from the risk-sensitive Kiwi.
With the latest leg down, the NZD/USD pair now seems to have confirmed a breakdown through the weekly trading range and the 0.6000 psychological mark. This, in turn, favours bearish traders and supports prospects for a further near-term depreciating move. market participants now look to the US economic docket – featuring the final Q4 GDP print, Weekly Initial Jobless Claims, Pending Home Sales and revised Michigan Consumer Sentiment Index.
NZD/USD is a shade below 0.6000. Economists at ANZ Bank analyze Kiwi’s outlook.
As we wind down for Easter, there’s no sign of global FX shifting away from their USD-centric beat ahead of a host of key US data including the core PCE deflator, ISM Mfg survey and JOLTS data between now and the middle of next week.
Locally, as fiscal challenges mount and commentators become more wary on the outlook for NZ, it’s hard to see where a good news story is going to come from.
Support 0.5750/0.5970 – Resistance 0.6255/0.6500
NZD/USD snaps its three-day winning streak, depreciating to near 0.5990 during the Asian hours on Thursday. The New Zealand Dollar (NZD) faces challenges due to the softer-than-expected domestic key economic figures, which in turn, undermine the NZD/USD pair.
ANZ – Roy Morgan Consumer Confidence decreased to 86.4 in February from 94.5 in the prior month. The index stepped down from January 2022 level highs. Business Confidence fell to 22.9 in March, from the previous reading of 34.7. Kiwi markets will observe Good Friday and Easter Monday.
At the Boao Forum for Asia (BFA), China's top legislator, Zhao Leji, underscored China's commitment to inclusive economic globalization. He articulated China's opposition to unilateralism and protectionism in all manifestations and expressed a dedication to closely aligning its development with that of other nations.
The US Dollar (USD) shows subdued momentum as investors await the release of Gross Domestic Product Annualized data for the fourth quarter of 2023 from the United States (US) on Thursday. Furthermore, Personal Consumption Expenditures for February on Friday. The US Dollar Index (DXY) hovers around 104.30. US Treasury yields rebounded after losses in the previous two sessions, supporting the US Dollar.
Market participants are eagerly awaiting guidance from the Federal Reserve (Fed) on its interest rate trajectory. However, conflicting views among members of the Federal Open Market Committee (FOMC) regarding monetary policy easing are adding to market uncertainty.
The NZD/USD pair is operating at around 0.6000 with losses, The market landscape is primarily dominated by sellers, underscored by a prevailing negative trend. The pair resides below the important 20, 100, and 200-day Simple Moving Averages (SMAs), emphasizing the strong presence of sellers. However, the hourly chart has clues for a potential short-term bullish reversal.
The Relative Strength Index (RSI) oscillates within the negative territory on the daily chart. at 35 near the oversold area, underscoring the prominence of sellers in the market. Concurrently, the predominance of flat red bars in the Moving Average Convergence Divergence (MACD) histogram affirms this negative momentum.
Switching to the hourly chart, the RSI moved towards its middle point but then retreated towards 40, implying a modest bias towards the buyers. In addition, the MACD histogram prints green bars which offer additional evidence of buyers gathering momentum.
Overall, the current dynamics of the NZD/USD pair infer a predominantly negative momentum. Nevertheless, the recovering indicators in the hourly chart point to a possible bullish reversal in the short term. Zooming out, the buyers must make a stride to reclaim the 200-day SMA at 0.6070 to avoid additional losses.
The NZD/USD pair finds interim support near 0.5990 in the European session on Wednesday. The Kiwi asset is vulnerable in the broader term as the New Zealand economy has shifted into a technical recession. The economy was contracted in the last two quarters of 2023.
The Reserve Bank of New Zealand (RBNZ) is facing a balancing act between high inflation and a poor economic outlook. To maintain downward pressure on stubborn inflation, the RBNZ maintains the Official Cash Rate (OCR) at 5.5%. However, economic activities bear the consequences. Low liquidity flow in an economy dampens firms’ investment plans and consumer spending.
Meanwhile, asset-specific action is being observed in global markets as risk-perceived currencies face the heat of uncertainty ahead of the United States core Personal Consumption Expenditure price index (PCE) data for February, which will be published on Good Friday. S&P 500 futures have posted significant gains in the London session.
The US Dollar Index (DXY) rises to 104.40, an inch away from monthly high of 104.50. 10-year US Treasury yields remain unchanged at 4.23%.
NZD/USD sees a sharp downside move after a breakdown of the Double Top chart formation near 0.6069 on a four-hour timeframe. The asset has tested territory below the psychological support of 0.6000 and is expected to discover more downside. The 50-period Exponential Moving Average (EMA) near 0.6040 is a major barricade for the New Zealand Dollar bulls.
The 14-period Relative Strength Index (RSI) oscillates in the bearish range of 20.00-60.000. Investors would look for building fresh shorts whenever the RSI witnessed a pullback to 60.00.
If the asset breaks below the intraday low of 0.5987, more downside will appear. This would drag the asset toward the November 17 low at 0.5940, followed by the round-level support of 0.5900.
In an alternate scenario, a recovery move above March 6 low at 0.6069 will drive the pair toward March 18 high at 0.6100. A breach of the latter will drive the asset further to March 12 low at 0.6135.
The NZD/USD pair remains on the defensive around 0.6000 despite the weaker US Dollar (USD) during Wednesday’s early Asian session. The ANZ Business Confidence will be due from the New Zealand docket, and Reserve Bank of New Zealand (RBNZ) Governor Orr is set to speak later in the day. Nonetheless, the market is likely to be mute in light trading ahead of the Good Friday holiday.
The US Federal Reserve (Fed) decided to hold interest rates between 5.25% and 5.5% at its March meeting last week. The Fed Chair Jerome Powell did not specify the timing for cutting rates but hinted that the first rate cut will be determined by what inflation measures and other key economic data show. Several Fed officials agreed to wait and see more evidence of inflation that ensures it heads back down to the 2% target before it cuts rates. Fed Governor Christopher Waller and Chicago Fed President Austan Goolsbee anticipate three cuts this year. Dovish comments from Fed officials weigh on the Greenback against its rivals.
On the Kiwi front, the technical recession in New Zealand’s economy in the final quarter of 2024 leaves ample space for the Reserve Bank of New Zealand (RBNZ) to cut the official cash rate (OCR) sooner than expected. An aggressive RBNZ rate-cutting cycle would in turn likely weigh on the NZD and create a headwind for the NZD/USD pair.
The US Personal Consumption Expenditures Price Index (PCE) data for February are due on Friday. The Fed's Powell is also scheduled to speak on the same day. In the case of slowing inflation data, this could prevent any rate cuts from the Fed and exert some selling pressure on the USD.
The NZD/USD trades on a flat note around the 0.6000 mark during the early Asian session on Tuesday. The USD Index (DXY) retreats from the recent peaks and remains above the 104.00 mark. Investors await the US February Personal Consumption Expenditures Price Index (PCE) data, which might offer some hints about underlying momentum in inflation.
On Monday, the US February New Home Sales dropped 0.3% MoM from a 1.7% gain in January, below the market expectations for a 2.3% MoM rise. Meanwhile, the Dallas Fed Manufacturing Survey fell to -14.4 in March from the previous reading of -11.3. The US PCE report on Friday will be in the spotlight. The headline PCE is estimated to show an increase of 0.4% MoM, while the Core CPE is projected to rise by 0.3% MoM.
The US Federal Reserve (Fed) policymakers indicated that they will be in a position to cut interest rates when they have confidence that inflation is progressing towards the 2.0% target. Investors anticipate the incoming data to rule out a May rate cut, and the first rate cut is likely to happen in the June meeting. According to CME Group's FedWatch tool, Federal Funds Futures have priced in 74.5% odds that the Fed will cut rates in June.
On the other hand, New Zealand’s economy entered a technical recession in the final quarter of 2024, driven by weak consumer spending and wholesale trade. This, in turn, weighs on the New Zealand Dollar (NZD) and creates a headwind for the NZD/USD pair. Additionally, the weaker-than-expected GDP growth numbers might convince the Reserve Bank of New Zealand (RBNZ) to cut the official cash rate (OCR) sooner than expected.
Moving on, US Consumer Confidence by the Conference Board, Durable Goods Orders, and the FHFA’s House Price Index will be due. On Wednesday, the New Zealand ANZ Business Confidence will be published. On Friday, the US PCE report will be a closely watched event.
NZD/USD continues its losing streak for the third successive session as the US Dollar (USD) falls on the dovish sentiment surrounding the Federal Reserve's stance on the trajectory of interest rates, with market sentiment leaning towards the Fed initiating interest rate cuts starting in June. The pair has trimmed its intraday gains and hovers around the psychological level of 0.6000 during the European session on Monday.
The NZD/USD pair could find a key barrier lies at the major level of 0.6050. A break above this level could lead the pair to navigate the area around the 14-day Exponential Moving Average (EMA) of 0.6076 and the 23.6% Fibonacci retracement level of 0.6086. A further movement could test the psychological level of 0.6100.
According to the Moving Average Convergence Divergence (MACD) analysis, a prevailing downward sentiment is indicated for the NZD/USD pair. This is evidenced by the MACD line positioned below the centerline and shows the divergence below the signal line, signaling a bearish trend. Furthermore, the 14-day Relative Strength Index (RSI) is below the 50 level, providing additional confirmation of the bearish sentiment.
On the downside, the NZD/USD pair could find the key support at the major level of 0.5950. A break below the latter could put pressure on the pair to navigate further support at a psychological level of 0.5900.
The NZD/USD pair posts modest gains below the 0.6000 barrier during the early European session on Monday. The modest uptick of the pair is backed by the weakening of the US Dollar Index (DXY) below the mid-104.00s. In the absence of top-tier economic data releases from New Zealand, the USD price dynamic will be the main driver for the NZD/USD pair. The pair currently trades near 0.5995, gaining 0.04% on the day.
The Federal Reserve (Fed) held the benchmark rate to the 5.25%-5.5% range at its March meeting last week. The Fed Chairman Jerome Powell emphasized after that meeting that policymakers are likely to cut interest rates later this year, but only once they have greater confidence that inflation is moving toward its 2% target. That being said, the dovish remarks from the Fed officials might weigh on the US Dollar (USD) and create a tailwind for the NZD/USD pair in the near term.
The US Fed maintained its outlook for the median dot plot for 2024 and hinted at three quarter-point rate cuts this year. However, Fed Bank of Atlanta President Raphael Bostic said on Friday that he expected just one interest rate cut this year instead of the two rate cuts he had forecast due to persistent inflation and stronger-than-anticipated economic data.
On the Kiwi front, the International Monetary Fund (IMF) stated in the report that the Reserve Bank of New Zealand will have scope to start cutting interest rates later this year as inflation returns to its target band. IMF added that inflation in New Zealand is projected to return to its central bank’s 1-3% target in the third quarter of this year.
The Chicago Fed National Activity Index, US New Home Sales for February, and Fed's Bostic speech are due on Monday. On Tuesday, the Durable Goods Orders will be released. The attention will shift to the release of US Gross Domestic Product Annualized on Thursday, which is expected to grow 3.2% in Q4. Traders will take cues from these events and find trading opportunities around the NZD/USD pair.
In Friday's session, the NZD/USD declined just below the 0.6000 threshold, illustrating a bearish outlook as sellers continue to dominate the market. The pair is positioned below its primary Simple Moving Averages (SMAs), further backing the bearish perspective. Technical indicators hint at a strengthening sellers' command but indicators lay in oversold terrain, a typical signal, and the buying momentum might recover.
On the daily chart, the Relative Strength Index (RSI) for the NZD/USD pair resides in negative territory presently, indicating a prevailing downtrend as sellers dominate the market. The RSI was reported at 33, bordering on oversold conditions, a potential indication for future corrective movement. The Moving Average Convergence Divergence (MACD) histogram exhibits rising red bars, also confirming the negative momentum.
Moving to the hourly chart, the RSI levels convey a relatively similar scenario. The value last rested at 28, corroborating its presence in the oversold territory. Contrarily, the MACD on the hourly chart displays rising green bars, hinting at a creeping positive momentum.
In essence, while the daily chart discloses a persisting bearish momentum, hourly indications of rising positive momentum in the MACD histogram may signal a reprieve from selling pressure. Looking at the broader trend, the pair is below the 20, 100, and 200-day Simple Moving Averages (SMAs), further implying a bearish outlook.
NZD/USD continues to lose ground on the second consecutive session on a stronger US Dollar (USD), which could be attributed to mixed data from the United States (US). The NZD/USD pair inches lower to near 0.6020 during the Asian trading hours on Friday.
The S&P Global Services PMI exhibited a slight decline in March, dropping to 51.7 from 52.3, slightly below the expected reading of 52.0. Conversely, the Manufacturing PMI increased to 52.5, surpassing expectations of 51.7 and the previous figure of 52.2. However, the Composite PMI showed a slight dip to 52.2 from the previous 52.5.
The US Dollar Index (DXY) is continuing to strengthen despite lower US Treasury yields. However, the US Dollar has encountered challenges due to the Federal Reserve's (Fed) reaffirmation of expectations for three interest rate cuts in 2024. The prevailing consensus indicates the initiation of an easing cycle in June, with the timing of subsequent cuts dependent on incoming data.
In February, New Zealand's Trade Balance improved to $-11.99 billion year-on-year, compared to the previous figure of $-12.62 billion. Both exports and imports witnessed an increase, rebounding from a minor decline observed in January. Exports surged to $5.89 billion from $4.81 billion, while imports rose to $6.11 billion from $5.9 billion.
Moreover, there are emerging hopes that the Reserve Bank of New Zealand (RBNZ) might consider cutting its official cash rate this year, rather than waiting until next year, in response to an unexpected recession in Q4 of 2023.
The NZD/USD pair is trading lower at around 0.6045, undergoing a 0.33% decline. The currency pair's market sentiment seems to lean towards the bearish side, with sellers maintaining a strong grip. On the hourly chart, the selling pressure eased somewhat but the bears are still present.
On the daily chart, the Relative Strength Index (RSI) remains in negative territory, suggesting that sellers dominate the market. Furthermore, the rising red bars of the Moving Average Convergence Divergence (MACD) histogram indicate growing negative momentum, further supporting this bearish outlook.
When reviewing the hourly chart, a similar pattern arises. The RSI still resides in the negative territory, indicating a bearish momentum prevailing in the market. The red bars of the MACD histogram continue to increase in this shorter timeframe, signaling the ongoing strength of the sellers. However, the latter flattened near the oversold indicating that the pair may consolidate the downwards movements ahead of the Asian session. Fundamental factors will be key as they could prompt another leg downwards.
A consistent negative trend is evident across both timeframes after comparing the daily and hourly charts. The RSI and MACD indicators suggest continuing domination by sellers in the NZD/USD pair. Surveying the larger context, the pair falls below the 20, 100, and 200-day Simple Moving Averages (SMAs), adding more evidence to the negative trend depicted in the daily and hourly charts.
The NZD/USD pair surrenders its intraday gains and turns negative in the early New York session on Thursday. The Kiwi asset falls back as the US Dollar rebounds sharply from its five-day low of 0.6060. The US Dollar Index (DXY) rises strongly to 103.76 as the Federal Reserve (Fed) has revised United States Gross Domestic Product (GDP) forecasts higher for 2024.
Fed’s latest economic projections indicate that the US economy will grow by 2.1% in 2024, upwardly revised from December’s projections of 1.4%. An upbeat economic outlook bodes well for the domestic currency.
Meanwhile, the S&P Global has reported mixed preliminary PMI data for March. The agency shows that the Manufacturing PMI surprisingly rose to 52.5 from the former reading of 52.2. Investors anticipated the factory PMI to decline to 51.7. The Services PMI that represents the service sector, which accounts for two-thirds of the economy, falls at a higher pace to 51.7 from expectations of 52.0 and the former reading of 52.3.
The appeal for risk-perceived assets has weakened despite firm market expectations for the Fed to reduce interest rates after the June policy meeting. The CME FedWatch tool shows that there is a little over 74% chance that a rate cut will be announced in June, which is significantly up from the 59% recorded before the Fed’s meeting.
On the Kiwi front, Statz NZ has reported that the economy was in a technical recession in the second half of 2023. The Q4 Gross Domestic Product (GDP) for 2023 surprisingly contracted by 0.1%, while investors projected the economy to have grown at a similar pace. In the third quarter of 2023, the NZ economy also contracted by 0.3%. A weak NZ economic outlook could force the Reserve Bank of New Zealand (RBNZ) to consider early rate cuts.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.