🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

New Zealand Dollar Gains for Second Day Against US Dollar

Published 05/31/2024, 07:52 AM
NZD/USD
-

The New Zealand dollar continues its ascent for the second consecutive session against the US dollar, resulting in the NZD/USD pair climbing to 0.6125. This increase is attributed to recent US economic data indicating slower-than-expected growth in Q1, suggesting the possibility of an interest rate cut by the end of the year.

The market is now focused on the upcoming release of the US Core Personal Consumption Expenditures (Core PCE) report, a pivotal inflation measure for the Federal Reserve. The report's outcome could offer further insights into the Fed's future actions.

Meanwhile, the New Zealand government has unveiled its annual budget report, which includes modest tax relief and spending cuts due to subdued economic growth. Other concerns for the economy include rising unemployment and a weak trade balance.
ё
Today's speech by the Reserve Bank of New Zealand (RBNZ) Governor is highly anticipated, particularly following the central bank's recent policy meeting.

Technical analysis of NZD/USD

NZD/USD forecast

The NZD/USD pair is developing within a wide consolidation range around 0.6136. A downward impulse to 0.6088 has been observed. Today, the market might see a corrective move to 0.6137 (testing from below). Following this correction, a new decline to 0.6070 is anticipated, with a potential breakdown of this level leading to a further decrease to 0.6002. The bearish scenario is technically supported by the MACD indicator, whose signal line is below zero and directed downwards. Notably, there is a significant divergence between the peaks on the chart and the indicator, which traders should monitor closely.

NZD/USD forecast

On the H1 chart, after forming a downward impulse to 0.6088, a correction to 0.6137 may occur today. Upon its completion, a new downward wave to 0.6075 is expected, with a potential continuation to 0.6000. This target is the first one in the expected downward trend. The technical setup is confirmed by the Stochastic oscillator, whose signal line is currently above 80 but is pointing sharply downwards, indicating the potential for a decline.

Summary

The NZD/USD pair's upward movement directly reflects recent US economic data and the market's expectations of potential Fed policy adjustments. Technical indicators suggest possible short-term corrections followed by further declines, providing critical levels for traders to watch as market conditions evolve. Today's speech by the RBNZ Governor could introduce volatility to the trading session, further impacting the currency's movement.

By RoboForex Analytical Department

Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.