CFD Trading Rate New Zealand Dollar vs US Dollar (NZDUSD)

• NZD/USD rebounds from five-month lows despite hawkish tone surrounding the Fed.
• Business NZ PSI decreased to 47.5 for March, from the previous reading of 52.6.
• Fed Kansas President Lorie K. Logan will speak in a panel discussion at the BoJ-IMF conference on Monday.

NZD/USD rebounds from a five-month low of 0.5927 reached on Monday, hovering around 0.5950 during the Asian trading hours. The New Zealand Dollar (NZD) might have faced a struggle as New Zealand’s services sector fell back into contraction during March. Business NZ Performance of Services Index (PSI) report posted a reading of 47.5 for March, as compared to 52.6 prior.

According to BNZ’s Senior Economist Doug Steel, when today’s weak PSI activity is combined with last week’s similarly weak PMI activity, the composite reading suggests that GDP could decline by more than 2% compared to year-earlier levels. This projection is significantly weaker than what most analysts are forecasting.

Furthermore, market participants will likely closely observe a slew of key data from top trading partner China on Tuesday, including Q1 Gross Domestic Product (GDP) readings and Retail Sales and Industrial Output for March. Traders will shift their focus to the release of New Zealand’s Consumer Price Index (CPI) data on Wednesday.

On the other side, the Federal Reserve (Fed) seems to reevaluate its monetary easing plans due to ongoing US inflation and robust macroeconomic indicators. Core US Producer Price Index (PPI) report showed on Thursday, an increase of 2.4% YoY in March. The market was expecting a rise to 2.3% from 2.1% prior.

Market participants are expected to closely watch the US Retail Sales figures due to be released on Monday. Additionally, Federal Reserve Bank of Kansas President Lorie K. Logan will participate in a panel discussion at the BoJ-IMF conference on Monday.

• The daily RSI of the NZD/USD reveals that sellers remain in command with values below 50.
• The daily MACD shows a slowdown in selling pressure as flat green bars begin to form.
• Buyers hint at gaining minor traction in the short term, with hourly indicators recovering.

The NZD/USD pair reflects the ongoing dominance of sellers, declining towards the 0.5935 mark. While signs of bearish control are evident, there is a clue of bullish resilience, hinting at a neutral to bearish outlook in the short term.

The daily  Relative Strength Index (RSI) maintains a consistent presence in the negative territory below 50, with the latest value at 38 which indicates that sellers are in command. That being said, green bars take shape on the Moving Average Convergence Divergence (MACD) histogram, indicating a slowing of the bearish momentum.

NZD/USD daily chart

In contrast, the hourly chart indicates a gradually increasing RSI with the latest reading at 47. This suggests a mild recovery of buying interest after dropping into oversold conditions earlier in the session. Moreover, the MACD histogram shows a fresh green bar, implying a positive change in the short term momentum.

NZD/USD hourly chart

With respect to the broader trend, the outlook is bearish with the pair below the 20,100 and 200-day Simple Moving Averages (SMAs). However, the pair is close to its 20-day average and if buyers regain additional ground and recapture it, the outlook may start to shift in favor of the bulls.

• A combination of factors prompts fresh selling around NZD/USD on Friday.
• Reduced Fed rate cut bets and geopolitical tensions lift the USD to YTD top.
• Weaker Chinese trade data drives flow away from antipodean currencies.

The NZD/USD pair meets with a fresh supply on Friday and drops to a fresh daily low following the release of weaker Chinese trade data during the early European session. Spot prices reverse the previous day's modest recovery gains and currently trade near the lower end of the weekly range, around the 0.5970-0.5975 region.

Data published by the Customs General Administration of China showed that exports declined sharply, by the 7.5% YoY rate in March as compared to the 3.0% fall expected and the 7.1% growth registered in the January-February period. Adding to this, imports fell by the 1.9% YoY rate during the reported month against the 1.2% rise anticipated and the 3.5% previous. This points to weak global as well as domestic demand and adds to concerns about recovery in the world's second-largest economy, which, in turn, undermines antipodean currencies, including the Kiwi. 

The US Dollar (USD), on the other hand, gains strong follow-through positive traction and hits a fresh YTD peak in the wake of expectations that the Federal Reserve (Fed) will delay cutting interest rates amid sticky inflation. Apart from this, persistent geopolitical tensions turn out to be another factor benefiting the safe-haven buck, which, in turn, is seen exerting downward pressure on the NZD/USD pair. The fundamental backdrop, meanwhile, suggests that the path of least resistance for spot prices is to the downside and any attempted recovery is likely to get sold into. 

Market participants now look forward to the release of the Preliminary Michigan Consumer Sentiment Index. This, along with speeches by influential FOMC members, will drive the USD demand later during the early North American session and provide some impetus to the NZD/USD pair. Nevertheless, spot prices remain on track to register weekly losses, though manage to hold above the YTD trough, around the 0.5940 region touched last week.

• NZD/USD dips below 0.6000 as US Dollar strengthens after the release of the hot US Inflation data.
• Investors see the Fed to begin reducing interest rates from September, previously anticipated from June.
• The RBNZ delivered a hawkish guidance after keeping the OCR steady at 5.5%.

The NZD/USD pair finds a temporary cushion near 0.5966 in Thursday’s European session after falling vertically from the round-level resistance of 0.6100. The Kiwi asset is expected to deliver more losses as the US Dollar strengthens after expectations for the Federal Reserve (Fed) pivoting to rate cuts shifted to the September policy meeting from prior anticipation in June.

The US Dollar Index (DXY) jumps to more than four-month high above 105.00 as stronger-than-expected United States inflation data for March forces traders to unwind bets supporting rate cuts by the Fed. Also, traders’ anticipation for number of rate cuts by the Fed this year reduced to two from three projected by policymakers in the latest dot plot.

Meanwhile, investors shift focus to the US Producer Price Index (PPI) data for March, which will be published at 12:30 GMT. The annual headline PPI is forecasted to have grown strongly by 2.2% after increasing 1.6% in February. In the same period, annual core PPI that excludes volatile food and energy prices is anticipated to have risen sharply by 2.3% against the former reading of 2.0%. 

On the Kiwi front, the Reserve Bank of New Zealand (RBNZ) kept its Official Cash Rate (OCR) unchanged at 5.5% for the sixth time in a row. The RBNZ delivered a hawkish guidance as annual price pressures at 4.7% are significantly higher than the desired range of 1-3%.

NZD/USD falls sharply while attempting to recapture the crucial resistance of 0.6100. The Kiwi asset trades in the Falling Channel chart pattern in which each pullback is considered as selling opportunity by the market participants. The long-term outlook of the Kiwi asset remains bearish as it trades below the 200-period Exponential Moving Average (EMA), which trades around 0.6100.

The 14-period Relative Strength Index (RSI) drops to 40.00. A bearish momentum would trigger if the RSI drops below the above-mentioned level.

Fresh downside would appear if the asset breaks below November 17 low at 0.5940. This would drag the asset toward the round-level support of 0.5900, followed by November 13 low at 0.587.

On the flip side, a recovery move above March 18 high at 0.6100 will drive the pair toward March 12 low at 0.6135. A breach of the latter will drive the asset further to February 9 high around 0.6160.

NZD/USD daily chart

• NZD/USD holds positive ground near 0.5982 after the Chinese economic data on Thursday. 
• Chinese CPI rose 0.1% YoY in March, compared to a 0.7% rise in February and the consensus of 0.4% increase.
• The strong US economy and elevated inflation triggered the Federal Reserve (Fed) to delay cutting interest rates this year.

The NZD/USD pair gains ground around 0.5982 on Thursday during the Asian trading hours. The Chinese Consumer Price Index (CPI) was softer than estimated in March, while the Producer Price Index (PPI) was in line with expectations. The attention will shift to the US PPI for March, due later on Thursday.

The latest key Chinese data from the National Bureau of Statistics of China indicated easing inflation in the world’s second-largest economy. China’s Consumer Price Index (CPI) rose 0.1% YoY in March, compared to a 0.7% rise in February and the consensus of a 0.4% increase. On a monthly basis, Chinese CPI inflation arrived at -1.0% MoM in March versus 1.0% prior, below the 0.5% decline estimated. 

Finally, China’s Producer Price Index (PPI) fell 2.8% YoY in March, compared with a 2.7% decline in the previous reading, beating market expectations in the reported period. Concerns over slowing economic growth in China have grown in recent months and the softer inflation data raises concerns about uncertain economic prospects, which might cap the upside of the China-proxy New Zealand Dollar (NZD) against the USD. 

On the other hand, the robust US economy and elevated inflation could convince the Federal Reserve (Fed) to cut interest rates this year. This, in turn, provides some support to the Greenback. According to the CME's FedWatch tool, financial markets now see a 66% likelihood of an interest rate cut at the September meeting. 

• NZD/USD marches toward 0.6100 as RBNZ’s hawkish interest rate outlook strengthens the Kiwi dollar.
• The RBNZ kept its OCR steady at 5.5% for the sixth time in a row.
• Investors await the US Inflation data that will influence expectations for Fed pivoting to rate cuts.

The NZD/USD pair advances toward the round-level resistance of 0.6100. The Kiwi asset exhibited strength in Wednesday’s European session as the Reserve Bank of New Zealand (RBNZ) delivered hawkish guidance after keeping its Official Cash Rate (OCR) unchanged at 5.50%.

The RBNZ hold its OCR steady at 5.50% for the sixth time in a row. The RBNZ commented that the monetary policy will remain restrictive to maintain downward pressure on inflationary pressures. The New Zealand economy is going through a rough phase as it remained in a technical recession in the second-half of 2023. Though the RBNZ needs to make a balance as annual inflation at 4.7% is significantly higher than the desired range between 1% and 3%.

Meanwhile, investors await the United States Consumer Price Index (CPI) data for March, which will be published at 12:30 GMT. According to economists, monthly headline and core inflation data are projected to have increased by 0.3%, higher than the pace of 0.17%, which is required for inflation to come down to the 2% target. This would not convince Federal Reserve (Fed) policymakers to consider rate cuts by the first half of this year.

The appeal for the US Dollar will strengthen if the inflation data turns out hotter than expected. Currently, the US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, is slightly down to 104.00.

NZD/USD continues its winning spell for the third trading session on Wednesday. The Kiwi asset recovers to 50% of the Fibonacci retracement (plotted from March 8 high at 0.6218 to April 1 low near 0.5940), which is at 0.6080. The asset remains above the 20-day Exponential Moving Average, which trades around 0.6040, suggesting that near-term demand remains intact.

The 14-period Relative Strength Index (RSI) approaches 60.00. If the RSI manages to break decisively above that level, bullish momentum will trigger.

Further upside above March 18 high at 0.6100 will drive the pair toward March 12 low at 0.6135. A breach of the latter will drive the asset to 78.6% Fibo retracement at 0.6160.

In an alternate scenario, a downside move would appear if the asset breaks below April 5 low of 0.5985. This would drag the asset toward November 17 low at 0.5940, followed by the round-level support of 0.5900.

NZD/USD four-hour chart

• NZD/USD experiences volatility after RBNZ’s interest rate decision.
• RBNZ holds its current Official Cash Rate at 5.5%.
• US Dollar receives downward pressure due to lower US Treasury yields.

NZD/USD has experienced fluctuations after the interest rate decision by the Reserve Bank of New Zealand (RBNZ). As expected, the central bank has maintained its Official Cash Rate (OCR) at 5.5% for the sixth consecutive meeting. The pair maintains position around 0.6060 during the Asian trading hours on Wednesday.

Policymakers emphasized the importance of keeping rates restrictive to curb inflation. Additionally, some economists perceived this decision as dovish, considering New Zealand's economy has entered a recession and consumer confidence has sharply declined. Markets are pricing in the possibility of the RBNZ's first rate cut in August.

US Dollar Index (DXY) attempts to hold its ground ahead of the release of the US Consumer Price Index (CPI) data and the FOMC Minutes scheduled to be released later in the North American session.

However, the US Dollar (USD) faced struggles due to lower US Treasury yields. At the time of writing, DXY consolidates around 104.10, with 2-year and 10-year yields on US Treasury bonds standing at 4.74% and 4.35%, respectively.

The US headline Consumer Price Index is anticipated to accelerate in March, while the core measure is expected to moderate. The US Dollar is in a state of anticipation, awaiting potential policy shifts influenced by incoming data. Strong labor market figures from last week may prompt a more hawkish stance from the Federal Reserve if inflation surpasses expectations.

According to the CME FedWatch Tool, the probability of a 25-basis point rate cut by the Fed in June has slightly risen to 53.5%. However, the likelihood of a rate cut in July has decreased to 49.9%.

• NZD/USD edges higher to 0.6065 in Wednesday’s early Asian session. 
• RBNZ will announce its monetary policy decision on Wednesday, with no change in rates expected as inflation remains too high.
• The recent US employment report raises speculation that the Fed might delay the easing cycle.

The NZD/USD pair trades in positive territory for the third consecutive day near 0.6065 during the early Asian section on Wednesday. Market players will closely watch the Reserve Bank of New Zealand (RBNZ) interest rate decision on Wednesday. Later in the day, the US March Consumer Price Index (CPI) inflation figures and the FOMC Minutes will be in the spotlight. 

The RBNZ is widely expected to maintain the Official Cash Rate (OCR) at 5.50% for the sixth meeting in a row. As a rate-on-hold decision is fully priced in, markets will monitor the tone of the New Zealand central bank and the timing of rate cuts. High inflation is a major factor in why the RBNZ is cautious of signals that rate cuts are imminent. Analysts believe the RBNZ would rather wait for the Federal Reserve (Fed) to cut rates first. This, in turn, might boost the New Zealand Dollar and create a tailwind for the NZD/USD pair.

On the USD’s front, the recent US employment report last week indicated the US economy added more jobs than expected, prompting speculation that the Fed might delay the easing cycle. Fed Chair Jerome Powell said that the US central bank could cut rates if the US economy continued on its current course, while adding that the main factor in the central bank's rate-cutting decision is when or whether inflation will return to the Fed’s 2% target. After the RBNZ monetary policy meeting, attention will shift to the US CPI inflation data and the FOMC Minutes, which might offer some insights about the further inflation and interest rate outlook. 

• The daily chart reveals a shift in NZD/USD from a bearish to a bullish short-term outlook.
• Hourly chart indicators echo the bullish trend visible in the daily analysis.
• Buyers will need to claim dominance over key SMAs to make strides in the market.

The NZD/USD rose to around 0.6058, reflecting a 0.41% gain on Tuesday's session. Despite the pair experiencing a momentum shift from bearish to bullish, it is positioned beneath key Simple Moving Averages (SMAs), hinting at a possible extended downtrend.

On the daily chart, the Relative Strength Index (RSI) rose from negative territory and is now within the positive zone. This indicates a reversal from a bearish trend to a bullish short-term outlook. Further strengthening that, the Moving Average Convergence Divergence (MACD) histogram prints rising green bars for the first time since mid-March, signaling a potential upward momentum.

NZD/USD daily chart

Turning to the hourly chart, the RSI is on the rise, mirroring the trend found on the daily chart. The MACD histogram on the hourly scale is relatively flat but displays red bars, indicating a mild negative momentum, probably hinting that the bulls are taking profits after the RSI hit overbought conditions earlier in the session.

NZD/USD hourly chart

Regarding the overall trend, the NZD/USD has demonstrated a significant jump above its 20-day Simple Moving Average (SMA), suggesting a bullish shift in the short-term outlook. This development indicates that the pair has found some near-term buying strength. However, it continues to be positioned below both the 100 and 200-day SMA, implying a long-term bearish stance. Further to this, the pair was recently rejected by its 100-day SMA at 0.6138, suggesting a reinforced resistance at this level. A sustained move above this level would be required to alter the overall bearish bias.

• NZD/USD advances to 0.6050 as the appeal for risky assets improves.
• The RBNZ is expected to hold the OCR steady at 5.5%.
• US inflation data for March will guide market expectations for Fed rate cuts.

The NZD/USD pair climbs to more than a two-week high near 0.6055 in Tuesday’s London session. The Kiwi asset soars as an appeal for risk-sensitive assets improves despite uncertainty ahead of the United States Consumer Price Index (CPI) data for March, which will be published on Wednesday.

S&P 500 futures have posted decent gains in the London session, portraying demand for risk-perceived assets. 10-year US Treasury yields correct to 4.40%. The US Dollar falls to 104.00.

According to economists, monthly headline and core inflation data are projected to have increased by 0.3%, higher than the pace of 0.17%, which is required for inflation to return to the 2% target. Traders would be wary of betting big on the Federal Reserve (Fed) to begin reducing interest rates from the June meeting if the inflation data remains hotter than anticipated.

Meanwhile, the New Zealand Dollar strengthens ahead of the Reserve Bank of New Zealand’s (RBNZ) interest rate decision, which will be announced on Wednesday. The RBNZ is widely expected to keep its Official Cash Rate (OCR) unchanged at 5.5%. Therefore, the next move in the New Zealand Dollar will be guided by a fresh interest rate outlook from RBNZ policymakers.

NZD/USD delivers a sharp upside after a breakout of the Falling Wedge pattern formed on a four-hour timeframe. A breakout of the aforementioned pattern suggests a bullish reversal, which exposes the asset to more upside.

The near-term demand turns bullish as the 20-period Exponential Moving Average (EMA) at 0.6023 slops higher.

The 14-period Relative Strength Index (RSI) shifts into the bullish range of 60.00-80.00, indicating a strong bullish momentum.

Further upside 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.

In an alternate scenario, a downside move would appear if the asset breaks below April 5 low of 0.5985. This would drag the asset toward November 17 low at 0.5940, followed by the round-level support of 0.5900.

NZD/USD four-hour chart

• NZD/USD faces struggles on contracted business outlook in New Zealand.
• RBNZ is anticipated to maintain cash rates at 5.5% for the sixth consecutive meeting on Wednesday.
• Headline US CPI could show an increase in March while the core measure is anticipated to cool down.

NZD/USD retains its position in positive territory, although it has trimmed some intraday gains, following the release of weaker Business Confidence data from New Zealand on Tuesday. At the time of writing, the pair trades near 0.6040 during the Asian session.

The NZIER Business Confidence (quarter-over-quarter) indicated a 25% contraction in the business outlook in New Zealand for the first quarter of 2024, compared to a 2% decline in the previous quarter. Additionally, the Reserve Bank of New Zealand (RBNZ) is scheduled to hold its monetary policy meeting on Wednesday.

The RBNZ is anticipated to maintain cash rates at 5.5% for the sixth consecutive meeting and emphasize the necessity to remain restrictive for a while longer to curb inflation. In February, the board indicated it would refrain from easing policy until 2025, citing worries about record immigration.

The NZD/USD pair saw gains as risk appetite improved ahead of the upcoming release of Consumer Price Index (CPI) data from the United States (US) scheduled for Wednesday. The CPI report is expected to show an acceleration in headline CPI for March while the core measure is anticipated to cool down. However, the US Dollar (USD) strives to recover its recent losses amidst market volatility.

Support for the US Dollar could stem from remarks by Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari, who emphasized the importance of bringing down the current inflation rate of around 3% to the target level of 2%.

• The RSI of the NZD/USD daily chart recovered but remains on negative terrain.
• The hourly RSI readings signal a possible short-term bullish trend, largely maintaining above the 50 level throughout Monday's session.
• As long as the pair remains below its main SMAs, buying signals won’t be credible.

The NZD/USD pair is currently trading at 0.6033, tallying daily gains on Monday’s session. Despite these gains, the situation is delicate for buyers as signs of short-term bullish tendencies are guaranteed, while the bearish momentum maintains a strong hold over the pair's broader outlook.

On the daily chart, the Relative Strength Index (RSI) continues to indicate bearish momentum, underscoring the pair's shift into negative territory since mid-March. Despite slight recoveries within the previous sessions, these movements remain insufficient to push the indicator above the 50 threshold, thereby maintaining the bearish outlook. On the positive side, the Moving Average Convergence Divergence (MACD) prints green bars, which shed a bit of light for the buyers, as it hints that momentum in mounting.

NZD/USD daily chart

Shifting to the hourly chart, the RSI values reveal a contrasting, more positive trend, with most of today's session hovering above the 50 level. Meanwhile, the MACD on this same hourly chart prints decreasing green bars, showing a tempering down of bullish momentum.

NZD/USD hourly chart

In conclusion, the are some hints of buyers gathering momentum on the daily and hourly chart. That being said, considering a more comprehensive view, where the pair still falls short of the 20,100, 200-day SMA, investors should tread cautiously around this short-term bullishness and stay aware of the larger bearish trend at play.

• NZD/USD is stuck in a tight range around 0.6000 as investors are sidelined ahead of the RBNZ policy decision.
• The market mood turns cautious as robust US labor data dents Fed rate cut expectations for June.
• The USD Index consolidates as the focus shifts to US Inflation data.

The NZD/USD pair trades sideways near the psychological level of 0.6000 in Monday’s late Asian session. The Kiwi asset struggles for a direction as investors stays on sidelines ahead of the interest rate decision by the Reserve Bank of New Zealand (RBNZ), which will be announced on Wednesday.

The RBNZ is widely anticipated to keep interest rates unchanged at 5.5% as inflationary pressures are significantly higher than the desired rate of 2%.

Last week, RBNZ Governor Adrian Orr said that the central bank is on track to get inflation back within the target band.

Investors will keenly focus on cues about when the RBNZ will start cutting its Official Cash Rate (OCR). New Zealand’s weak economic prospects could spurt expectations of early rate cuts. The Kiwi economy was in a technical recession in the second half of 2023. The RBNZ could pivot to rate cuts if the economic outlook remains vulnerable.

S&P 500 futures posted some losses in the Tokyo session, portraying uncertainty among market participants. 10-year US Treasury yields jump to 4.43%. Investors turn cautious as upbeat United States Nonfarm Payrolls (NFP) report for March has dented speculation for the Federal Reserve (Fed) to begin reducing interest rates from the June meeting.

The US Dollar Index (DXY) remains rangebound, trades inside Friday’s trading range around 104.30. This week, investors will focus on the inflation data for March, which will be published on Wednesday. The consumer price inflation data will indicate about when the Fed will start reducing interest rates.

• The daily MACD shows a slight positive momentum, despite the overall bearish bias.
• The daily RSI indicates that the sellers are dominating, though the indicator's flat trajectory suggests that the bearish momentum may be slowing.
• On the hourly chart, the RSI oscillated near the neutral zone, showing inconsistent bearish-bullish signals.

The NZD/USD pair is trading at 0.6013, indicating a drop of 0.26% in Friday's session but will close a winning week. The prolonged downward trend suggests that sellers command the current market. However, the short-term outlook reveals a slight bullish momentum, which could lead to a period of sideways trading in the next sessions.

The daily Relative Strength Index (RSI) resides in negative territory, with a slightly flat slope, indicating sellers dominate this market but seem to be taking a breather. Moreover, the Moving Average Convergence Divergence (MACD) histogram has registered a green bar, pointing to a slight emergence of positive momentum.

NZD/USD daily chart

On the hourly chart, the most recent RSI reading of 47 hovers close to the neutral zone while the MACD histogram draws flat green bars, which can be interpreted as somewhat positive short-term momentum.

NZD/USD hourly chart

Regarding the overall trend, the NZD/USD remains under the 20,100 and 200-day SMA indicating that the overall trend favors the bears. So in case the buyers manage to gain ground, any movement below these levels wouldn’t be considered a serious buying signal.

• NZD/USD drifts lower to 0.6012 on the stronger USD on Friday. 
• US Initial Jobless Claims last week jumped to 221K compared to 212K prior, the highest since January.
• The RBNZ is expected to keep interest rates on hold at its policy meeting next week.

The NZD/USD pair trades on a softer note near 0.6012 on Friday amid the firmer US Dollar (USD). The markets turn to a cautious mood ahead of the key US labor market data, including Nonfarm Payrolls (NFP), Unemployment Rate, and Average Hourly Earnings for March.

The Labor Department reported on Thursday that the weekly Initial Jobless Claims last week went up to the highest level since January. The number of Americans filing new claims for unemployment benefits jumped to 221K for the week ended March 30 compared to 212K prior, below the consensus of 214K. Additionally, the Continuing Claims decreased to 1.791M in the week ended March 23.

Investors will shift their focus to the highly-anticipated Nonfarm Payrolls (NFP), due on Friday. The NFP figure is projected to show that the US economy added 200K jobs in March from 275K rise in February. Meanwhile, the Unemployment Rate is forecast to remain steady at 3.9% in March. If the US NFP data portrays a stronger-than-expected result, this might temper June Fed rate-cutting expectations, offering some support to the Greenback and dragging the NZD/USD pair lower. According to the CME FedWatch Tool, financial markets are now pricing in nearly 65% odds that the Fed will lower its interest rate in June, up from 60% in the previous week. 

On Thursday, the New Zealand Building Permits improved to 14.9% MoM in February from an 8.6% decline in the previous reading, Statistics New Zealand showed. The Reserve Bank of New Zealand (RBNZ) is expected to keep interest rates on hold at its policy meeting next week. The central bank noted that it needs to keep policy restrictive to ensure that inflation expectations become fully anchored. However, investors will take more cues from the policy statement, the dovish tweaks to the outlook might drag the New Zealand Dollar (NZD) and create a headwind for the pair. 

• The hourly chart signals a possible short-term rise in selling pressure with a shar decline in the RSI.
• The negative outlook remains on the daily chart.
• The bearish crossover between the 20 and 200-day SMAs implies a strong negative momentum.

The NZD/USD pair is trading at around 0.6025 and trimmed most of its daily gains on Thursday. After getting rejected by the 20-day Simple Moving Average (SMA) the latest upwards movements seem to have been short-lived and didn’t present a battle to the bearish overall trend.

On the daily chart, the Relative Strength Index (RSI) has shown slow movement from negative to positive territory over past sessions and now resides at around 47.15. However, the flat red bars of the Moving Average Convergence Divergence (MACD) indicate a steady negative momentum.

NZD/USD daily chart

On the hourly chart, the RSI proved more erratic, reaching a positive value of 70 earlier in the session and dropping to 50. This fluctuation suggests a possible short-term shift in momentum favoring the sellers. The MACD, continues to print red flat bars, indicating sustained negative momentum throughout recent hours.

NZD/USD hourly chart

Concerning its Simple Moving Averages (SMAs), the NZD/USD is below the 20,100 and 200-day SMAs. Thursday’s 20-day SMA rejection adds further arguments that the bullish momentum is weak. Moreover, the mentioned average completed a bearish crossover with the 200-day SMA which may eventually limit any upward momentum.

• NZD/USD has probably reversed its downtrend on the short-term timeframe. 
• It was falling in a large Measured Move pattern, however, there is a chance this may not reach the target for C. 
• A bullish close on Thursday would result in a “Three White Soldiers” Japanese candlestick reversal pattern on the daily chart. 

NZD/USD has been broadly falling in a bearish three-wave pattern, known as a Measured Move but intraday charts are now signaling that the short-term trend has probably reversed. 

Measured move price patterns are composed of an A, B, and C leg, in which waves A and C are commonly of the same length – or related by a 0.618 Fibonacci ratio. 

 New Zealand Dollar versus US Dollar: Daily chart

The pattern on NZD/USD has already fallen to its conservative target at the point where C being equal to a 0.618 Fibonacci ratio of wave A (0.5988). It has not yet reached the target calculated as equal to the length of wave A. 

Over the last three days the exchange rate has reversed, however, and risen up strongly, bringing into doubt whether the end of C will be achieved. 

If Thursday’s daily candle ends green and therefore bullish it will complete a Japanese candlestick reversal pattern called a bullish Three White Soldier pattern. This happens when three consecutive up days occur after a long downtrend. It would be accompanied by high bullish momentum reinforcing the pattern’s reliability – a signal the NZD/USD will probably go higher. 

The 4-hour chart, commonly used to assess the short-term trend of an asset, is showing NZD/USD has probably reversed over that timeframe. 

 New Zealand Dollar versus US Dollar: 4-hour chart

Since the April 1 lows, NZD/USD has rallied strongly. It has broken above the last swing high of the prior downtrend at 0.5995 and has completed two sets of higher highs and higher lows. It has done all this on high bullish momentum. This indicates the short-term trend has probably reversed. 

The Relative Strength Index (RSI) momentum indicator is now in overbought territory, however, indicating price is overbought and there is an increased risk the pair could pull back. If it exits overbought and returns to neutral territory it will give a sell-signal and a correction is anticipated. Such a correction could very well fall back down to the 0.5995 highs for support. 

Since RSI has entered overbought it recommends for long holders trading over a short-term time frame to not increase the size of their positions. If NZD/USD exits overbought it will be a sign to liquidate longs and open shorts. 

Resistance from the 100-4 hour Simple Moving Average (SMA) at 0.6034 adds credence to the possibility of a pullback evolving.

• NZD/USD gains ground as domestic Building Permits showed a notable increase in February.
• New Zealand’s Building Permits MoM rose by 14.9% in February against the previous decline of 8.6%.
• US ISM Services PMI fell to 51.4 in March from 52.6 in February.

NZD/USD continues its upward momentum for the third consecutive day, reaching near 0.6020 during the Asian session on Thursday. The seasonally adjusted Building Permits (Month-on-Month) data released by Statistics New Zealand showed improvement, with a notable increase of 14.9% in February, rebounding from the previous decline of 8.6%.

However, the Reserve Bank of New Zealand (RBNZ) cautioned that headline inflation remains outside the desired range of 1 to 3%. Investors are eagerly awaiting the RBNZ's policy meeting scheduled for next week. Additionally, investors are expressing concerns over the potential economic impact of a 7.2 magnitude earthquake that struck Taiwan on Wednesday, particularly on the semiconductor supply chain in New Zealand.

The US Dollar (USD) encountered challenges following the release of mixed economic data from the United States (US), consequently, underpinning the NZD/USD pair. In March, the US ADP Employment Change rose by 184,000, surpassing February's increase of 155,000 and exceeding the market consensus of 148,000. However, the US ISM Services PMI declined to 51.4 from 52.6 in February, falling short of the anticipated level of 52.7.

The US Dollar Index (DXY) struggles as Federal Reserve (Fed) Chair Jerome Powell reiterated the central bank's readiness to implement rate cuts, emphasizing a data-dependent approach. Additionally, remarks from Atlanta Fed President Raphael Bostic, advocating for a rate cut in the final quarter of 2024. Furthermore, market participants are expected to closely monitor the release of US Initial Jobless Claims for the week ending on March 29, scheduled for Thursday.

• The daily RSI recovered from near-oversold levels.
• The hourly chart indicators exhibited a sharp uptick with the RSI above 70.
• Buyers need to breach the key 20-day SMA for further ascents.

The NZD/USD was trading around the 0.6000 zone during Wednesday's session, reflecting an increase of 0.55%. The technical outlook indicates that sellers have had a more significant influence on the market. Nevertheless, buying momentum grew during the session as the Greenback was one of the weakest performers due to fundamental reasons.

On the daily chart, the Relative Strength Index (RSI) predominantly exists in negative territory, despite Wednesday’s recovery from oversold areas, and currently stands at 44. This indicates that stronger market influence is currently in the hands of sellers despite the slight recovery.

NZD/USD daily chart

Turning to the hourly chart, an upward trend in the RSI was observed, reaching a peak at 76 before falling slightly to 71 as investors took some profits. At the same time, the Moving Average Convergence Divergence (MACD) histogram exhibited flat green bars, hinting at a waning short-term momentum. Despite an active sellers' market on the daily chart, the hourly indicators suggest a more balanced market with potential opportunities for buyers.

NZD/USD hourly chart

Broadly speaking, the NZD/USD is currently performing under a bearish signal across all Simple Moving Averages (SMA) as it trades below its 20,100-day, and 200-day  averages. The completed SMA crossover between the 20 and 200-day averages adds arguments for a negative outlook and could limit the pair's upside.