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BoC Rate Cut Speculation Weighs on Canadian Dollar, Boosts USD/CAD.

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  • September 3, 2025
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USD/CAD currency pair is becoming stronger, marching towards 1.3800, largely because of rising chances of an interest rate reduction by the Bank of Canada (BoC). Market participants are now pricing in greater odds of a rate reduction in September, after a softer-than-projected economic downturn in the second quarter and the continuing effects of tariffs. This expected monetary policy divergence, with the BoC possibly cutting rates while the US Federal Reserve continues to be more dovish, makes the Canadian Dollar (CAD) less desirable. On top of that, a worldwide bond market selloff is enticing investors towards the safe-haven US Dollar (USD), further increasing the pair. Though escalating crude oil prices may provide some relief to the commodity-linked CAD, overall sentiment is in favor of a stronger USD as market players look to major US economic releases, such as the JOLTS Job Openings and the Fed’s Beige Book, for direction. KEY LOOKOUTS • Watch closely for the scheduled US JOLTS Job Openings and Fed Beige Book, which may hold hints of the health of the US labor market and economy. • The market now prices in 55% probability of a rate cut at the next Bank of Canada meeting on September 17. • As an oil-linked currency, the value of the CAD is dictated by crude oil prices. • General market “risk-off” mood induced by mounting worldwide debt mountains continues to play into the safe-haven USD, providing a steady tailwind for the USD/CAD pair. Canadian Dollar (CAD) recent decline against the US Dollar (USD), forcing the USD/CAD pair towards 1.3800, is mainly due to evolving monetary policy expectations. With the market now pricing a greater likelihood of an interest rate reduction by the Bank of Canada (BoC) on September 17, following a recent period of economic decline, the CAD is no longer attractive to investors wanting higher yields. This is compounded by a worldwide “risk-off” mood spurred on by increasing sovereign debt levels, causing safe-haven flows to go towards the US Dollar. Although higher crude oil prices may act as a natural support for the commodity-linked CAD, the divergent policy expectations of the BoC and the Federal Reserve, as well as the general risk aversion, are likely to keep the USD/CAD pair supported in the near future. CAD is under pressure as markets expect a BoC interest rate cut on 17th September. The US Dollar is gaining traction as a safe-haven currency as the world becomes increasingly concerned about the global economy, with the focal point today being US JOLTS Job Openings and Fed Beige Book for further guidance. The direction of the pair will be greatly determined by the divergence in monetary policy and overall risk appetite. • The main impetus for the strength of the USD/CAD is the rise in market expectation of a Bank of Canada interest rate reduction on September 17. • The expectation is driven by a sharper-than-expected decline in Canada’s Q2 economic production, which has pulled down the Canadian dollar. • A surge in debt worries and a global bond market sell-off are driving risk aversion, which prompts investors to turn into the haven of the US Dollar, further supporting the USD/CAD pair. • The BoC’s potential for rate cuts against the Federal Reserve’s more conservative policy stance creates an extremely powerful tailwind for the USD. • A crude oil price hike may play a counter-force role, as Canada is one of the largest oil-exporting nations, and this may help support the CAD and cap the pair’s upside. • Upcoming later today are key economic indicators such as the US JOLTS Job Openings and the Fed Beige Book, and these are expected to impact the pair’s near-term direction. • Outside of September, BofA economists expect additional BoC rate reductions in October and December that will further put pressure on the CAD over the next few months. The US Dollar is rallying against the Canadian Dollar with the currency pair now trading at around 1.3800 mainly due to a change in market expectations regarding the Bank of Canada (BoC). A recent Canadian economic slowdown has caused traders to raise substantially their bets for a BoC rate cut in September, from the 40% probability last week to almost 55% currently. This expected monetary policy divergence, with the Canadian central bank set to cut its rates while the US Federal Reserve holds back, is one of the main concerns affecting the Canadian Dollar. Second, increasing global debt and economic instability are inducing investors to flee to safe-haven currencies, with the US Dollar as a major beneficiary of this risk-off demand. USD/CAD DAILY PRICE CHART SOURCE: TradingView Aside from the monetary policy and risk drivers, the price of crude oil is also a factor in this scenario. While the Canadian dollar is generally assisted by stronger oil prices, the current trend of weakening is strong enough to overcome this commodity-related correlation. Market focus is now shifting towards future US economic releases, namely the JOLTS Job Openings and the Fed Beige Book, for more indications regarding the US economy’s well-being. Any indication of the strengthening of the US might reinforce such a belief that the Fed will delay rate cuts, widening the policy differential between the two nations further and potentially driving the USD/CAD pair upward. TECHNICAL ANALYSIS The USD/CAD pair has been displaying a clear trend upwards, as it is trading in positive mode for the third day in a row. The pair’s recent price at 1.3795 is a major level since it has been a resistance level previously. A break above this level, sustained, could be taken as an indication of additional bullish action, possibly aimed at the next resistance level at 1.3850 and then 1.3900. If the pair is not able to break through this level of resistance, it may retreat towards its recent support levels, which stand at 1.3710 and 1.3610. The short-term direction is underpinned by fundamentals such as divergence in monetary policy, but the traders will be waiting for a confirmed breakout through technical

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Currencies NZD/USD

NZD/USD Hits Four-Month Lows at 0.5800 as Markets Await Powell’s Jackson Hole Speech

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  • August 22, 2025
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New Zealand Dollar (NZD) extended its losing streak for the fifth consecutive session, dropping to a four-month low of near 0.5800 against the US Dollar prior to Federal Reserve Chair Jerome Powell’s speech at Jackson Hole. The Kiwi continues to come under pressure following the dovish rate cut by the Reserve Bank of New Zealand earlier this week, while the US Dollar is supported by safe-haven demand and hopes of hawkish policy cues. Market participants are wary, but a break below 0.5800 for an extended period is viewed as a catalyst for further losses, despite the oversold conditions hinting at the possibility of a short-term bounce. KEY LOOKOUTS • The markets wait with bated breath for policy signals from Fed Chair Jerome Powell, and hawkish comments will send the US Dollar higher again. • The recent 25 bps OCR reduction and dovish split voting keep weighing on the Kiwi, setting up higher expectations for further easing to come. • Support is at 0.5800 immediately, with greater risk of downside to 0.5765 should it break, and resistance at 0.5835–0.5870. • Risk-off sentiment and safe-haven demand for the US Dollar can continue to weigh on NZD/USD in the short term. NZD/USD declined to the 0.5800 level, a four-month low, as investors grew cautious before Fed Chair Jerome Powell’s much-awaited speech in Jackson Hole. The duo is under pressure from the Reserve Bank of New Zealand’s dovish rate cut late in the week, which boosted expectations of more monetary easing, while the US Dollar remains buoyant on safe-haven buying. Market attention now is on comments by Powell, with hawkish messages expected to push the pair down to the next support level of 0.5765, although oversold levels could curb further decline in the short term. NZD/USD fell to 0.5800, four-month low, as risk appetite continues to be weak in anticipation of Powell’s speech at Jackson Hole. The Kiwi remains vulnerable to the dovish tilt by the RBNZ, while the US Dollar benefits from safe-haven demand. • NZD/USD fell to 0.5800, the lowest since mid-April. • The pair is set to post a nearly 2% weekly loss. • Pre-Powell’s Jackson Hole risk-averse sentiment is supporting the US Dollar. • A dovish tone is suppressing the Kiwi after the Reserve Bank of New Zealand reduced the OCR by 25 bps to 3%. • Technical analysis pinpoints 0.5800 as key support, with more downside to 0.5765 if breached. • High resistance at 0.5835 and 0.5870 now caps potential rebounds. • Overbought conditions indicate a potential short-term rebound, although general sentiment is still bearish. The New Zealand Dollar is still under intense pressure as investors respond to changing global monetary policies and increasing uncertainty in financial markets. The Reserve Bank of New Zealand’s rate reduction by 25 basis points this week has cemented a dovish tone, with policymakers indicating room for additional easing in the future. The action has eroded confidence in the Kiwi, with traders still expecting weakening domestic growth and softer labor market conditions. NZD/USD DAILY PRICE CHART SOURCE: TradingView Meanwhile, the US Dollar is getting support from risk aversion and investor hesitancy before Federal Reserve Chair Jerome Powell’s address at Jackson Hole. Markets are closely monitoring for any signal on the Fed’s future actions, with the chance of hawkish comments to support the Dollar’s superiority. Joined with the ongoing international economic worries, the defensive sentiment has left the New Zealand Dollar fighting to find buyers, underpinning the general spread of central bank divergences. TECHNICAL ANALYSIS NZD/USD is at the level of critical support of 0.5800, a breakdown below which could pave the way toward the next bearish target of 0.5765. Although the pair is still oversold following the last few days of straight decline, support levels are limited to 0.5835 and 0.5870, maintaining the overall bearish stance. The pair needs a clean break above these support points to start a sustained rebound, but as long as the pair is below 0.5870, the downward momentum is likely to prevail. FORECAST In the near term, NZD/USD may experience a limited bounce if oversold levels prompt profit-taking or Powell’s speech provides a dovish surprise. A rally back to 0.5835 and perhaps 0.5870 is feasible, although gains are likely to be limited unless general market sentiment turns positive towards risk assets. Any indications of stabilisation from the RBNZ or positive local data would also support the Kiwi. On the negative side, a convincing break below the 0.5800 level would leave the pair vulnerable to further weakness, with the next substantial support at 0.5765. Powdering hawkish statements by Powell or chronic risk aversion in world markets would drive selling pressure on the Kiwi. If short-term bearish momentum continues, the danger of a lengthy decline towards fresh yearly lows would rise, keeping NZD/USD under bearish dominance in the near future.

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Currencies EUR/USD

EUR/USD Rebounds Amidst Fading US-China Optimism and Eurozone Strength

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  • June 10, 2025
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EUR/USD pair has reversed earlier losses, moving back above 1.1420, as investor confidence in the US Dollar wanes amidst ongoing, complex US-China trade negotiations. While positive remarks from President Trump initially offered some USD support, market participants remain cautious, awaiting concrete progress on challenging issues like rare earths and chip exports. Simultaneously, the Euro is finding support from positive Eurozone data, including a significant improvement in the Sentix Investors’ Confidence Index and hawkish comments from ECB officials, along with better-than-expected Italian Industrial Output. The pair is expected to remain within its recent trading range as the market awaits further developments from the trade talks. KEY LOOKOUTS • The specifics and timeline of any resolution to the ongoing trade discussions will be crucial, as a breakthrough could boost risk sentiment and the US Dollar, while prolonged impasses could weigh on it. • Following their recent rate cut, any further signals from the ECB regarding the pace or pause of future monetary policy adjustments, particularly in light of evolving inflation data, will significantly impact the Euro’s trajectory. • Continued strength in Eurozone economic indicators, such as consumer confidence and industrial output, will be essential to sustain the Euro’s current support. Any signs of weakening could shift sentiment against the currency. • The release of US Consumer Price Index (CPI) data will be a key determinant for Federal Reserve policy expectations and, consequently, the strength of the US Dollar. EUR/USD pair is currently experiencing a rebound, trading above 1.1420, driven by a confluence of factors: waning confidence in the USD due to the intricate and drawn-out US-China trade negotiations, coupled with renewed strength in the Eurozone. Though early supportive statements from US President Trump over the trade talks provided some temporary boost to the dollar, the market is still guarded with respect to the complicated issues in question, including rare earths and chip export bans, which require high concession from both parties. Simultaneously, the Euro is gaining traction from favorable economic data, including a notable improvement in the Sentix Investors’ Confidence Index for June, turning positive for the first time in a year, alongside hawkish remarks from ECB officials and better-than-expected Italian Industrial Output figures. As a result, the pair is expected to largely remain confined within its recent trading ranges as investors await definitive outcomes from the ongoing trade discussions. The EUR/USD has reversed earlier losses, climbing above 1.1420 as waning confidence in the US Dollar, stemming from complex US-China trade talks, converges with growing optimism for the Euro. This Euro strength is fueled by positive Eurozone investor confidence and hawkish comments from ECB officials. The pair is likely to remain range-bound as markets await concrete developments from the trade negotiations. • The pair has retraced previous losses, moving back above 1.1420. • Confidence in the US Dollar is declining due to ongoing US-China trade talks. • While some positive remarks exist, investors are awaiting concrete progress on “thorny issues” in US-China trade. • The Sentix Investors’ Confidence Index in the Eurozone significantly improved in June, turning positive for the first time in a year. • Comments from ECB officials (Olli Rehn and Francoise de Villeroy) have reinforced a hawkish stance. • Italian Industrial Output advanced against expectations, further supporting the Euro. • The pair remains within recent trading ranges as investors are reluctant to place large directional bets until trade developments become clearer. The current market environment sees the Euro regaining some ground against the US Dollar, influenced by shifting sentiment around global trade. While initial reports hinted at constructive discussions between the US and China, the complexities of reaching a comprehensive trade agreement appear to be creating some uncertainty, causing a re-evaluation of the US Dollar’s recent strength. Investors are taking a more cautious stance, patiently awaiting clear signals about the path forward for the world’s two largest economies, especially concerning challenging areas like rare earth minerals and technology exports. NZD/USD DAILY PRICE CHART CHART SOURCE: TradingView In parallel, the Euro is finding its own foundation for support from within its own region. Recent economic data from the Eurozone has shown encouraging signs, notably with a significant improvement in investor confidence. This positive sentiment is further bolstered by statements from European Central Bank officials, indicating a more attentive approach to monetary policy in the future. Combined with solid industrial output figures from Italy, these developments collectively contribute to a more favorable outlook for the Euro at this time. TECHNICAL ANALYSIS EUR/USD pair has seen a notable reversal, climbing back above the 1.1420 level and holding within a recent trading range. This consolidation suggests that while bulls have found a footing, they are currently encountering resistance, preventing a clear breakout. The price action indicates a battle between buyers and sellers around these levels, with investors awaiting a decisive catalyst—likely from the ongoing US-China trade talks—to establish a new directional trend. Key support and resistance levels within this range will be closely watched, as a clear break above or below these points could signal the next significant move for the pair. FORECAST Euros could continue to rally against the Greenback if a truly meaningful and comprehensive breakthrough in the US-China trade negotiations becomes material. Any deal that leads to a resultant substantially large cut or removal of tariffs is likely to boost the risk appetite at the world level, reduce demand for safe haven USD, and encourage capital flows to more growth-sensitive currency like Euro. Additionally, sustained positive momentum in Eurozone economic data, particularly if inflation figures remain elevated but growth continues to show resilience, could lead the European Central Bank (ECB) to adopt a more hawkish stance than currently anticipated. If the ECB signals fewer rate cuts or even a pause in its easing cycle, this would significantly bolster the Euro. Conversely, the EUR/USD pair faces downside pressure if the US-China trade talks stall or completely break down. The current “thorny issues” like rare earths and chip exports could prove difficult to resolve, leading to prolonged uncertainty or even an

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Currencies

USD/CAD Holds Firm Above Mid-1.3900s on Mixed Signals: Oil Prices Drag Loonie While US Credit Downgrade Cuts Gains

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  • May 19, 2025
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USD/CAD currency pair holds firm above the mid-1.3900s, trading in a comfortable range on mixed market signals. Weaker crude oil prices continue to suppress the commodity-sensitive Canadian dollar, lending some support to the USD/CAD. But bearish pressure on the US dollar from a recent credit rating downgrade and anticipation of future Federal Reserve rate cuts dampen the pair’s upside. Moreover, increasing optimism surrounding a possible US-Canada trade agreement provides further warning for bullish traders. There is no important economic data due on Monday, so market attention turns to FOMC speeches and movements in oil prices, which could present short-term trading opportunities. KEY LOOKOUTS • USD sentiment could be influenced by statements from key FOMC members. • Since Canada’s dollar is heavily influenced by crude prices, dramatic shifts in oil markets will also affect the pair’s momentum. • Additional news or responses about the US government’s credit downgrade could continue to put pressure on the USD and influence the currency pair. • News or negotiations of a possible trade deal could drive the Canadian dollar higher and curb USD/CAD’s advances. Market participants will carefully monitor forthcoming Federal Reserve speeches to read tea leaves about the direction of US interest rates, which can have a profound effect on the USD/CAD pair. In the interim, crude oil price volatility continues to be a key factor, as it directly affects the commodity-sensitive Canadian dollar. Moreover, any subsequent developments or market responses concerning the recent US credit rating downgrade will tend to put pressure on the strength of the US dollar. Lastly, developments in US-Canada trade talks will be watched closely, as a prospective agreement would strengthen the Canadian currency and cap the pair’s upside potential. Traders will look to Federal Reserve rhetoric for direction on interest rates, while moves in the oil price remain a big influence on the Canadian dollar. Events surrounding the US credit rating downgrade and US-Canada trade negotiations will also be important in determining the near-term direction of USD/CAD. •  USD/CAD stays firm above mid-1.3900s, trading in a familiar range. •   Weaker crude oil prices support the Canadian dollar, underpinning USD/CAD gains. •  The US dollar is under pressure due to a recent credit rating downgrade. •  Federal Reserve rate cut expectations contain the USD’s upside potential. •  Hopes for an imminent US-Canada trade agreement bolster the Canadian dollar. •  No significant economic data releases are scheduled from the US or Canada on Monday. •  Future Federal Reserve speeches and oil price actions may generate short-term volatility. USD/CAD currency pair keeps trading steadily within a well-known range as mixed political and economic forces determine market sentiment. The Canadian currency continues to be driven by fluctuations in oil prices, indicative of the nation’s close association with the energy industry. And other events like the US government’s credit downgrade and US monetary policy expectations help trigger wary trading practices. USD/CAD DAILY PRICE CHART CHART SOURCE: TradingView Moreover, continuing discussions among US and Canadian policymakers regarding trade policy policy give some hope of increased economic collaboration, and that can provide a boost to the Canadian dollar. With no significant economic data due in the near future, investors are focusing intently on statements from major policymakers as well as trends in global oil markets for hints about the currencies’ future path. Generally, traders are being cautious, weighing these different factors as they try to navigate the situation. TECHNICAL ANALYSIS USD/CAD currency pair is stuck in a well-consolidated range, indicating minimal momentum for a definitive break. Crucial support zones in the vicinity of the mid-1.3900s have remained intact, whereas resistance around the 1.4000 level continues to limit upside attempts. Minimal directional cues point to the fact that traders are holding back in anticipation of sharper market drivers in order to initiate larger positions. Momentum indicators and moving averages at this point in time indicate a neutral position, hinting at the pair’s consolidation amidst mixed fundamental forces. FORECAST If USD/CAD succeeds in breaching the crucial level of resistance at 1.4000, it could pave the way for more gains. A rise in the US currency—perhaps inspired by comments from Federal Reserve officials being hawkish or an oil price rebound—would most likely fuel this movement. Any delays in US-Canada trade talks and any setbacks could also press down on the Canadian currency, leaving more latitude to the USD/CAD exchange rate to increase. To the negative, fresh strength in crude oil prices would add to the Canadian dollar and exert downward pressure on the USD/CAD. Advancements in US-Canada trade negotiations or other better-than-expected economic news in Canada could also add to the loonie. Additionally, if the US dollar continues to get battered by issues like the credit rating downgrade or decelerating economic growth, the pair would test support levels in the mid-1.3900s or even extend lower.

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Currencies USD/JPY

Japanese Yen Suffers Moderate Losses Versus USD but Bulls Expect Hopes for Trade Deal and BoJ Policy Divergence

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  • April 15, 2025
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The Japanese Yen (JPY) is suffering moderate intraday losses versus the US Dollar (USD), with market optimism on US President Donald Trump’s tariff relief and an upbeat risk mood eroding the safe-haven demand for the Yen. Yet, fears of the US-China trade war, coupled with expectations of a US-Japan trade agreement, offer some relief to the JPY. Moreover, the differing monetary stances of the Bank of Japan (BoJ) and the Federal Reserve (Fed) also restrict the downside for the Yen, as investors expect BoJ rate increases with increasing domestic inflation, while the Fed is likely to cut rates because of the economic fallout from tariffs. Technical levels indicate that while the USD/JPY pair can encounter resistance near 144.00, any prolonged weakness below 143.00 might induce bearish momentum towards major support levels. KEY LOOKOUTS •  Expectations of a favorable result from on-going trade talks between the US and Japan can be a tailwind for the Japanese Yen and could counter the general market optimism surrounding risk assets. •  The Bank of Japan’s anticipated rate hikes compared to the Federal Reserve’s possible rate reductions based on the economic impact of tariffs may constrain the downside for JPY and cap the USD/JPY pair. •  The tariff choices made by President Trump, such as possible exemptions in the auto industry and electronics sector, and a threat of increased levies to industries like semiconductors and pharmaceuticals, will persist in shaping sentiment in the market and the future outlook for the USD/JPY. •  Critical technical levels to monitor are resistance around 144.00, with a breakout above that having the potential to spark a rally, while failure below 143.00 would have the potential to trigger additional bearish pressure towards the 142.00 and 141.00 marks. The Japanese Yen (JPY) is experiencing modest losses against the US Dollar (USD) because of a favorable market risk tone and US President Donald Trump’s tariff relief, which reduces the Yen’s safe-haven appeal. Nevertheless, apprehensions regarding the US-China trade war and rising expectations of a US-Japan trade deal are assisting in capping the Yen’s decline. In addition, the mismatch between Bank of Japan (BoJ) and Federal Reserve (Fed) policies, where market expectations are for BoJ rate hikes and possible Fed rate cuts, provides additional support for the JPY. With key events expected in trade negotiations and central bank decisions, technical levels are also emerging as significant, with resistance at 144.00 and support at 142.00 likely to influence the USD/JPY pair’s future directions. The Japanese Yen is seeing moderate losses against the US Dollar, fueled by a risk-positive tone and US reprieves on tariffs, but fears of the US-China trade war and optimism over a US-Japan trade agreement are capping the downside. The difference in monetary policies between the Federal Reserve and the Bank of Japan is further underpinning the Yen. •  The Japanese Yen is experiencing moderate losses against the US Dollar because of more favorable market sentiment and lower demand for safe-haven assets. •  US President Trump’s short-term exemption of consumer electronics and possible auto industry exemptions from tariffs have strengthened market optimism, influencing the strength of the Yen. • Continued worries regarding the intensifying US-China trade war remain a drag on global growth expectations, supporting the JPY to some extent as a safe-haven currency. • Optimism regarding a favorable outcome in US-Japan trade talks is serving as a tailwind for the Yen, countering wider USD strength. • The Bank of Japan will likely increase interest rates, and the Federal Reserve might reduce interest rates as a result of economic effects from tariffs, which will support the Yen against the USD. • The USD/JPY pair has resistance at the 144.00 level, with additional upside limited unless the pair breaks above this level and maintains higher momentum. • The Japanese Yen is supported at 142.00, and additional weakness will take the USD/JPY currency pair towards 141.00, which can be considered as a sign of bearish sentiment if broken. The Japanese Yen (JPY) is weakening against the US Dollar (USD) owing to a positive risk sentiment in the market and a decrease in safe-haven demand. This follows as US President Donald Trump issued temporary exemptions for consumer electronics and suggested potential leniency towards the auto sector in terms of tariffs, which has boosted market sentiment and put pressure on the Yen. Meanwhile, fears of the US-China trade war and expectations that Japan might reach a trade agreement with the US continue to offer some support for the Japanese currency, capping its losses. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView Besides, the differential monetary policy between the Federal Reserve (Fed) and the Bank of Japan (BoJ) is key in determining the prospects for the Yen. While the BoJ is likely to hike interest rates because of surging domestic inflation, the Fed can trim rates because of the economic effect of continued tariffs. This difference in central bank policies indicates that the Yen can gain from the BoJ’s tightening policy while the US Dollar is under pressure from the Fed’s possible easing policies. As the US-Japan trade negotiations progress, the future direction of the Yen will be heavily dependent on the overall economic developments and monetary policy actions of both countries. TECHNICAL ANALYSIS USD/JPY pair is struggling with important resistance around the 144.00 level, where any move higher may face serious obstacles. If the pair is able to break above this, then it has the potential to unleash a short-covering rally and drive prices towards the 144.45-144.50 levels, and possibly beyond to the 145.00 psychological mark. On the flip side, if the pair drops below 143.00, then the support would presumably come from the 142.25-142.20 region, and a breach below this level would pave the way for a subsequent fall towards the 142.00 level. A plunge below this level of support could indicate a bearish trend, and targets would extend to 141.65-141.60 and possibly lower. FORECAST USD/JPY pair may witness bullish movement if it breaches the 144.00 resistance level. A consistent push beyond this point

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Currencies NZD/USD

NZD/USD Price Prediction: Testing Important Support at 0.5700 With Deteriorating Momentum

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  • March 25, 2025
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NZD/USD keeps losing ground, heading towards the important psychological support level of 0.5700 with deteriorating medium-term momentum. Though the pair is still in an uptrend channel, the 14-day RSI falling below 50 indicates a possible bearish trend. A continued dip below the 50-day EMA of 0.5716 heightens the risk of further falls to 0.5660 and potentially the monthly low at 0.5593. But if NZD/USD rallies above the 50-day EMA, it may regain momentum, testing the nine-day EMA of 0.5744 and potentially rising to the March high at 0.5832. KEY LOOKOUTS • A decisive break below this level may amplify bearish momentum, pushing NZD/USD to 0.5660 and possibly 0.5593. •A rebound above this level would recover medium-term bullish momentum, and the nine-day EMA would be retested at 0.5744. •The 14-day RSI falling below 50 indicates diminishing buying pressure, which raises the risk of further losses. •Should bullish momentum improve, NZD/USD could test its three-month high with further resistance at 0.5880. NZD/USD is on the back foot as it approaches the psychological 0.5700 support, with the fading 14-day RSI flashing a possible turn to the south. A breakthrough below this will propel the pair towards the base of the ascending channel at 0.5660 and conceivably towards the monthly low of 0.5593. Yet, a bounce back above the 50-day EMA at 0.5716 can reignite bullish momentum to retest the nine-day EMA at 0.5744. If the pair is able to break above this resistance, it can gain more momentum towards the March high of 0.5832, with further resistance at 0.5880. NZD/USD is probing the important support level of 0.5700, with bearish pressure increasing as the 14-day RSI falls below 50. A penetration below this level may drive the pair to 0.5660 and 0.5593, while a rally above the 50-day EMA of 0.5716 may reinstate bullish pressure, taking the level to 0.5744 and higher. • A penetration below this level may fan bearish pressure to 0.5660 and 0.5593. • Indicative of fading buying pressure, raising the prospect of further decline. • A bounce above here could restore bullish momentum. • Serves as the next resistance point if the pair rallies. • A breakdown below here could confirm a more bearish tilt. • If bullish momentum re-emerges, the pair might retest the March high. • The top of the rising channel might limit further advance. The NZD/USD currency pair is still the focus in the forex market since investors follow its performance closely amid changing economic environments. The movements of the currency pair are determined by variables including global market mood, releases of economic data, and policies from central banks. With continued talk of inflation, interest rates, and trade policies, investors are looking at broader economic data that can influence the New Zealand and U.S. economies. Market players are also taking into account external considerations like geopolitical events and movements in commodity prices, which have the potential to significantly influence investor sentiment. NZD/USD DAILY PRICE CHART CHART SOURCE: TradingView Furthermore, the U.S. dollar’s strength relative to the New Zealand dollar tends to be influenced by economic data, such as employment data, GDP growth, and patterns of consumer spending. Any movement in these factors may affect trading patterns, resulting in market positioning adjustments. The traders are also considering risk sentiment, as developments in international financial markets may induce demand for safe-haven currency such as the U.S. dollar or risk currency such as the New Zealand dollar. As economic circumstances develop, market players remain vigilant and sensitive to emerging developments that may frame the long-term direction of the NZD/USD cross. TECHNICAL ANALYSIS NZD/USD shows weakening momentum as the pair lingers close to crucial support levels. The price is still in an uptrend channel, but a recent fall below crucial moving averages indicates short-term pressure. The 14-day RSI dipping below 50 indicates decreased buying strength, raising the likelihood of further downside action. But if the pair bounces back above its moving averages, it may regain bullish momentum, and hence potential resistance tests. Traders closely observe support and resistance levels, trendlines, and momentum indicators to predict the pair’s next direction in the market. FORECAST Should NZD/USD regain traction, a bounce above principal resistance levels will enhance bullish sentiment. A bounce above near-term moving averages might draw buyers, generating a move towards higher resistance levels. Better risk appetite, positive economic reports, or a declining U.S. dollar can further drive the upward move. Should bullish momentum prevail, the pair can test earlier highs, with further gains likely if market conditions continue to be positive. On the downside, a break below key support levels could trigger further selling pressure. Weak economic indicators, stronger U.S. dollar demand, or risk-averse market conditions may contribute to downward movement. If selling pressure intensifies, NZD/USD could move toward lower support zones, with potential for extended losses if bearish sentiment prevails. Traders will closely monitor price action for confirmation of a deeper decline or possible stabilization.

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AUD/USD Currencies

Australian Dollar Rises as US Dollar Weaks on Economic Data and Trade Tensions

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  • March 3, 2025
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The Australian Dollar (AUD) recovered on Monday, halting a six-day losing streak after the US Dollar (USD) softened following supportive US PCE inflation data that alleviated worries of surprise inflation surges. Positive Chinese economic data, including an increase in the Caixin Manufacturing PMI, further helped the AUD. Though, rising US-China trade tensions with President Trump escalating tariffs on Chinese imports threaten to spoil the outlook for the currency. Meanwhile, the AUD/USD pair struggles at key support levels of 0.6200, where technical indicators signal a dominant bearish bias except when the pair surges through resistance levels. KEY LOOKOUTS • Surprise in forthcoming US inflation statistics or Federal Reserve policy changes might substantially influence the AUD/USD exchange rate. • The Australian Dollar remains sensitive to China’s economic health, with strong PMI data supporting gains while trade tensions pose downside risks. • Heightened tariff disputes between the US and China could weigh on the AUD, given Australia’s deep trade ties with China. • The AUD/USD pair is testing the 0.6200 support level, with potential resistance at 0.6280 and 0.6290, determining short-term market direction. Traders must keep a close eye on important economic and geopolitical variables that are affecting the Australian Dollar (AUD). US inflation reports and Federal Reserve policy moves will be very important for determining the AUD/USD exchange rate, as any surprise change can cause volatility. China’s economic growth is still an important driver, with good PMI numbers supporting while rising US-China trade tensions offer negative risks. Market players must also observe technical levels since the AUD/USD pair tests the 0.6200 support level, with possible resistance at 0.6280 and 0.6290, which might define the short-term trend. The Australian Dollar’s direction is dependent on US inflation data, Federal Reserve policy, and Chinese economic performance. Rising US-China trade tensions and significant technical levels also influence AUD/USD trends. • Surprises in US inflation reports or Federal Reserve announcements have the potential to affect the AUD/USD currency exchange. • Solid Chinese PMI reading benefits the AUD, while disappointing numbers would affect its performance. • Escalating tariff battles between China and the US risk jeopardizing Australia’s trade-focused currency. • Decreases in the TD-MI Inflation Gauge indicate deflating inflation, affecting the policy of the Reserve Bank of Australia. • AUD/USD is probing the 0.6200 support, with significant resistance at 0.6280 and 0.6290. • The USD is under pressure as inflation numbers are in line with forecasts, dampening fears of aggressive Fed tightening. • US-Ukraine tensions and trade policies could cause general market uncertainty, indirectly influencing AUD/USD trends. The Australian Dollar (AUD) strengthened as the US Dollar (USD) was kept under wraps after the release of US PCE inflation data, which was in line with expectations and helped alleviate concerns regarding surprise inflation surges. Moreover, positive Chinese economic news, such as an increase in the Caixin Manufacturing PMI, also supported the AUD. As China is Australia’s largest trading partner, stronger manufacturing activity boosts demand for Australian exports, reinforcing the currency’s position. Meanwhile, Australia’s TD-MI Inflation Gauge showed a slight decline, indicating a continued slowdown in inflation, which aligns with the Reserve Bank of Australia’s monetary policy stance. AUD/JPY Daily Price Chart Chart Source: TradingView However, global trade tensions remain a critical factor influencing the AUD’s outlook. The US threatened further tariffs on Chinese imports, ramping up the current trade war, which might have spillover effects on Australia’s trade relations. Uncertainty over US-China relations and general geopolitical trends might impact investor attitudes towards the Australian economy. Policy moves by both the US Federal Reserve and the Reserve Bank of Australia will also influence market expectations for future economic conditions and currency movements. TECHNICAL ANALYSIS The AUD/USD currency pair is now probing the important support level of 0.6200, a psychological level that is important for traders. The pair is still under pressure, trading below the nine-day and 14-day Exponential Moving Averages (EMAs), indicating declining short-term momentum. The 14-day Relative Strength Index (RSI) is also below 50, which supports a bearish bias. If the currency falls below 0.6200, it will go even lower to 0.6087, the low of April 2020. To the upside, a strong resistance area will be encountered around 0.6280 (nine-day exponential moving average, EMA) and 0.6290 (14-day EMA). A sustained breakthrough of these will have it touching the latest three-month peak at 0.6408 on its retest. FORECAST Future moves in the Australian Dollar will tend to hinge significantly on releases of economic statistics as well as broader global sentiment. If US inflation stays under control and the Federal Reserve hints at a more conservative strategy to raise interest rates, the USD might depreciate, giving a boost to the AUD. Also, persistent strength in China’s economy, especially in manufacturing, could continue to support the Australian Dollar as Australia has close trade relations with China. A breakout above significant resistance levels could propel the AUD/USD pair further up, with the next key target around 0.6400. On the flip side, persisting US-China trade tensions represent a major threat to the AUD’s strength. Any rise in tariffs or geopolitical uncertainty can spark risk-off flows, making the Australian Dollar lose strength. Also, if Australian inflation weakens further and induces the Reserve Bank of Australia to turn dovish, the AUD may experience further pressure. A clear breakdown below the 0.6200 support may trigger further losses, which may push the pair towards the 0.6087 level, a level which was last hit in April 2020.

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