NZD/USD keeps heading north, with 0.6400 resistance on sight

• The New Zealand Dollar is approaching a relevant resistance area at 0.6400
• The positive market mood on hopes of lower rates in 2024 is weighing on the US Dollar.
• NZD/USD is expected to appreciate further in 2024 – ANZ.

The Kiwi maintains its near-term bullish bias intact and keeps trading higher against the US Dollar, consolidating at five-month highs at 0.6330, favoured by the positive market mood.

Risk appetite is driving markets on a calm post-Cristmas session, with investors cheerful as they see the turning point in the global tightening cycle. 

The US Federal Reserve is seen rolling back its restrictive policy from March with the rest of the major central banks coming shortly afterwards. This is expected to promote economic growth and avoid a global recession, which is supporting risky assets like the Kiwi, to the detriment of the safe-haven US Dollar.

The calendar is practically void today, and the only events worth mentioning this week are the US Weekly Jobless claims and the Existing Home Sales, due on Thursday.

Against this backdrop, risk appetite is expected to drive the FX markets before relevant macroeconomic data is released in the first week of 2024.

NZD/USD is expected to appreciate further next year – ANZ

From a wider perspective, the ANZ Bank´s Technical analysis team seesaw the pair advancing in 2024: “We think the NZD has room to rise in 2024, but not without volatility. Our year-end forecast for NZD/USD is 0.63 in 2024 (...) A global return of risk appetite and the NZD’s high carry advantage will drive the upside we expect into 2024. Our bearish USD view and a positive cyclical outlook bode well for high beta currencies like NZD.”

Technical levels to watch