NZD/USD remains firmly above the 0.6000 level, with bulls approaching a multi-week high
FUNDAMENTAL OVERVIEW:
- NZD/USD gains significant positive momentum, supported by several factors.
- Reduced expectations for a rate cut by the RBNZ and a favorable risk tone bolster the Kiwi.
- Additionally, dovish Fed expectations weaken the USD bulls and aid the upward movement.
- Investors are now looking to Wednesday’s RBNZ meeting and upcoming U.S. inflation data for further direction.
The NZD/USD pair draws new buyers after an intraday dip below the 0.6000 mark, maintaining its gains through the early European session on Monday. Currently trading around 0.6025, just below a three-week high reached on Friday, the pair awaits fresh direction from this week’s central bank meetings and crucial U.S. inflation data.
The Reserve Bank of New Zealand (RBNZ) is set to announce its policy decision on Wednesday. Meanwhile, U.S. investors will be watching the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Wednesday, which could impact expectations for the Federal Reserve’s policy and influence near-term demand for the USD, thus affecting the NZD/USD pair.
Meanwhile, the New Zealand Dollar (NZD) may continue to benefit from last week’s stronger-than-expected jobs report, which reduced the likelihood of an RBNZ rate cut. In contrast, the USD is pressured by expectations of a 50 basis point rate cut by the Fed in September. Additionally, a positive equity market tone further weighs on the safe-haven USD and supports the risk-sensitive Kiwi.
However, it remains uncertain whether bulls can maintain momentum given ongoing concerns about the slowing Chinese economy, which could impact demand for antipodean currencies like the Kiwi. Despite this, recent price action and the bearish sentiment around the USD suggest the NZD/USD pair is likely to trend upward. Any significant pullbacks may be seen as buying opportunities and are expected to be limited.
NZD/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
NZD/USD is trading within a up channel.
NZD/USD is moving above all Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 0.6032
Immediate support level: 0.5987
HOW TO TRADE NZD/USD
The NZD/USD pair, after dipping lower, found support and rebounded from its support zone. It has now surpassed its previous resistance level and is trading above it. Currently, it is near a key resistance level, and a breakout above this level could lead to further gains.