The NZD/USD currency pair bounced back above 0.5700 after RBNZ Governor Adrian Orr’s speech and has continued with its bullish trend despite the central bank reducing the Official Cash Rate (OCR) by 50 basis points. The currency pair is still within an uptrend channel, with the 14-day RSI remaining above the 50 mark, which supports the positive outlook. Immediate support lies at the nine- and 14-day EMAs of 0.5695 and 0.5685, respectively, while resistance is seen at the 0.5790 level, aligning with the upper boundary of the channel. A break below 0.5650 could weaken the bullish bias, potentially pushing the pair toward its lowest level since October 2022 at 0.5516.
KEY LOOKOUTS
• NZD/USD encounters resistance at the top of the ascending channel at 0.5790, with a breakout likely taking the price to the two-month high of 0.5794.
• Nine- and 14-day EMAs are nearest supports, and a breakdown below 0.5650 deters the bullish trend and augments downward pressure.
• RBNZ’s 50 bps rate reduction and forecasts of more easing can steer NZD/USD’s path, altering investor sentiment and expectations of monetary policy.
• The 14-day RSI is still above the 50 level, indicating ongoing bullish momentum, but a fall below this level could signal a possible trend reversal.
The NZD/USD currency pair is still trading with a bullish bias, remaining above the critical 0.5700 level despite pressure from the RBNZ’s surprise rate cut. Governor Adrian Orr’s comments indicated further easing in the next few months, which could affect market sentiment and future price action. The pair is still in an uptrend channel, with the 14-day RSI upholding the positive direction. But a firm break below 0.5650 may change the bias to negative, leaving the pair vulnerable to more downside risks. Traders will keenly observe future economic data and central bank statements for additional directional signals.
NZD/USD is bullish above 0.5700 on the back of an uptrending channel and RSI above 50. Break below 0.5650 may undermine momentum, turning the sentiment bearish. Market players look to RBNZ policy outlook and pivotal resistance at 0.5790 for the next cue.
• The pair is bullish despite RBNZ’s 50 bps interest rate cut, underpinned by technical indicators.
• A surge above this level may drive NZD/USD to its new two-month high at 0.5794.
• The nine-day EMA of 0.5695 and the 14-day EMA of 0.5685 are key support levels.
• A fall below the lower boundary of the ascending channel at 0.5650 could see additional downward pressure.
• The 14-day Relative Strength Index indicates ongoing bullish momentum unless it falls below this important threshold.
• Governor Orr’s perspective on future rate reductions affects market sentiment and the pair’s long-term direction.
• Traders need to watch for upcoming economic releases and central bank commentary for additional directional signals.
The New Zealand dollar is still in the spotlight as traders respond to the Reserve Bank of New Zealand’s recent policy move. Governor Adrian Orr’s address brought attention to the central bank’s strategy for economic stability, with a focus on the requirement for prudent rate changes. The RBNZ lowering of the Official Cash Rate is its move to bolster growth under uncertainty globally. As inflation dynamics and jobs data become central in guiding policy, investors watch closely as these elements drive the country’s economic trajectory.
NZD/USD Daily Price Chart
TradingView Prepared by ELLYANA
External forces such as trade conditions and global market dynamics aside from monetary policy also determine the New Zealand dollar’s performance. As global commodity demand changes and geopolitics plays out, the currency is also sensitive to wider economic movements. The overall market forces are also brought about by changes in investor mood, especially reacting to U.S. Federal Reserve policy and general global financial health. With continued progress in local and global economies, investors stay alert to the next set of data releases and policy changes.
TECHNICAL ANALYSIS
NZD/USD is bullish as the currency pair continues trading in an rising channel, reflective of consistent short-term upward motion. The 14-day Relative Strength Index (RSI) continues to maintain a position higher than the 50 mark, confirming the bearish sentiment. Furthermore, the currency pair stands above the nine- and 14-day Exponential Moving Averages (EMAs), further supporting strong support at the current short-term. Resistance is seen around the 0.5790 level, which is along the channel’s top line, and the major support levels are at 0.5695 and 0.5685. A strong break above resistance would drive the pair further up, and a break below support would suggest a change in market direction.
FORECAST
NZD/USD can continue to rise if the bullish momentum continues, with the next major resistance at 0.5790. A break above this level might propel the pair towards the latest two-month high of 0.5794, further sustaining the upbeat sentiment. The pair’s rally may be aided by positive economic news, risk taking in international markets, or any indication of less hawkish monetary policy from the U.S. Federal Reserve. If the buyers continue to have control, more gains towards the 0.5850 zone can be envisioned in the short term.
To the downside, unless NZD/USD can hold above significant levels of support, a breakdown below 0.5650 would set the pair up for more declines. Changes in sentiment prompted by softer economic data or greater risk aversion would put downward pressure on the pair. NZD/USD would then probe lower support near 0.5516, its lowest print since October 2022. Any hawkish comments from the U.S. Federal Reserve or firmer demand for the U.S. dollar would drive the bearish move forward, and additional losses can be expected in the next few weeks.
