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Currencies NZD/USD

NZD/USD Steady around 0.5700, Traders Keep an Eye on US NFP and Fed Policy Cues

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  • February 7, 2025
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NZD/USD stays firm around 0.5700 as market players remain cautious of the US Nonfarm Payrolls (NFP) release which is expected to have an influence on the monetary policy decisions by the Federal Reserve. The US Dollar keeps up its rebound momentum with support coming from a jump in Treasury yields, pushing the Dollar Index DXY toward 107.70. Market sentiment is fragile due to rising risk aversion with all these uncertainties about global trade. But ongoing discussions about tariffs by US and China could offer some comfort. Further, the Reserve Bank of New Zealand is going to slash 50 basis points in February and put further pressure on Kiwi Dollar. KEY LOOKOUTS US Nonfarm Payrolls, which would shape monetary policy at the Fed, would impact the NZD/USD pairs volatility. • The Greenback’s rebounding, with a boost from the Treasury yields and economic data, may put upward pressure on NZD/USD if risk aversion increases. • Markets are pricing in 92% of a 50 basis-point rate cut in February, which can weigh on the New Zealand Dollar. • Risk sentiment may shape the movement of NZD/USD as US and Chinese leaders discuss potential rollbacks of tariffs. NZD/USD remains in a cautious range as traders await the US Nonfarm Payrolls (NFP) data, which could significantly impact the Federal Reserve’s monetary policy stance. The US Dollar continues to recover, bolstered by rising Treasury yields and stronger economic data, pressuring the Kiwi Dollar. Meanwhile, global risk sentiment remains fragile with trade uncertainties continuing, though the discussions between the US and China regarding potential rollbacks of tariffs might bring some comfort. The Reserve Bank of New Zealand is also expected to cut its rates by 50 basis points in February, adding more downside risks to NZD/USD as the market has priced in a high probability of further easing. NZD/USD remains range-bound ahead of the US Nonfarm Payrolls (NFP) data that may impact the Federal Reserve policy. The greenback has managed to regain ground, buoyed by Treasury yields, and has been exerting pressure on the Kiwi Dollar. Expectations of a 50 basis point rate cut in February by the RBNZ are also affecting NZD/USD. • A US Nonfarm Payrolls report is expected to impact the Fed’s monetary policy and trigger market volatility. • Greenback trades are regaining strength on the back of rising treasury yields with DXY approaching 107.70. • Markets are expecting that in February, there will be a 50-point rate cut; it will give pressure on New Zealand Dollar. • Increased risk aversion due to trade and economic insecurity is impacting upside momentum for NZD/USD pairs. • The 2-year and 10-year Treasury yields are at 4.22% and 4.44%, supporting the US Dollar against risk-sensitive currencies such as the Kiwi. • Market sentiment and the movement of NZD/USD may be influenced by the discussions between US and Chinese leaders regarding the possible rollbacks of tariffs. • NZD/USD is still relatively subdued following the weak performance of the previous session, failing to gain bullish momentum due to a cautious market outlook. NZD/USD stands at the levels around 0.5700 and is currently flat as participants take a wait-and-see approach before US Nonfarm Payrolls (NFP) arrives and is known to impact Federal Reserve monetary policy prospects. Meanwhile, the Dollar index continues rallying due to upward momentum in the Treasury yields; it has also pushed the Dollar Index towards levels around 107.70. Risk sentiment remains fragile as the world continues to be uncertain about global trade, especially on the US-China front, though potential tariff rollbacks may help alleviate some of the pain. Moreover, the latest US Initial Jobless Claims were higher than anticipated, which added another layer of uncertainty to the market. NZD/USD Daily Price Chart TradingView Prepared by ELLYANA Another reason the Kiwi Dollar is in a tough situation is that it is expected the Reserve Bank of New Zealand, RBNZ, will announce a 50 basis point rate cut in February, taking interest rates to 3.75%. With market expectations at a 92% probability of additional monetary easing, NZD/USD may suffer from increased pressure on the downside. The weak price action exhibited by the pair is due to investors waiting for key economic data that will steer short-term price action. US Treasury yields continue to climb, adding further strength to the US Dollar, which restricts NZD/USD’s recovery from the previous session’s losses. TECHNICAL ANALYSIS NZD/USD is trading near 0.5680, unable to make a sustainable rally as it was capped by the resistance area of 0.5700. The pair remains below the 50-day and 200-day Exponential Moving Averages (EMA), suggesting a bearish trend. A break below the immediate support at 0.5660 could be extended further lower toward 0.5620. A decisive move above 0.5700 may push the pair further to the next resistance at 0.5745. The RSI is near the neutral 50 level, showing a lack of strong momentum in either direction. Traders will carefully monitor the US NFP releases for breakouts or further drops in NZD/USD. FORECAST NZD/USD will drop further if NFP data strengthen the case of a hawkish Federal Reserve which pushes the Dollar higher. Higher Treasury yields after a strong job report will add to the views of prolonged periods of higher interest rates, with NZD/USD falling towards key support 0.5660. If the bearish momentum is maintained, the next target could be 0.5620, with further declines towards the psychological level of 0.5600 in an extended selloff. Expectations of a 50 basis-point rate cut by the Reserve Bank of New Zealand (RBNZ) in February could keep the Kiwi Dollar under pressure in the near term. On the positive side, if US economic data disappoints and weakens the US Dollar, NZD/USD might recover above 0.5700. A softer NFP report might fuel speculation of an earlier-than-expected policy shift by the Federal Reserve, which would reduce the strength of the Dollar. The pair could test resistance at 0.5745, and further gains may extend toward 0.5780. Any positive news in US-China trade relations, such as the rollbacks of tariffs, will enhance risk sentiment and

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Currencies GBP/USD

GBP/USD Extends Above 1.2400 on Tariff Uncertainty and BoE Rate Cut Expectations

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  • February 4, 2025
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GBP/USD stayed above 1.2400, trading at around 1.2430 as market sentiment improved in the wake of US President Donald Trump’s decision to hold back tariffs on Mexico and Canada. However, uncertainty remains since China will have to endure a 10% all-around tariff with definitive trade talks set for within the next 24 hours. The US Dollar Index (DXY) has stabilized at 108.70, buoyed by the release of positive ISM Manufacturing PMI data. The Pound was under pressure due to expectations of a 25 basis point reduction in interest rates by the BoE to 4.5% on Thursday as inflation indicators slow down. Market volatility still keeps traders wary. KEY LOOKOUTS • GBP/USD traders look for the 10% tariff on China, with the potential for volatility depending on the outcome of US-China trade negotiations. • The Bank of England is likely to cut the rates by 25 bps to 4.5%, which will weigh on the Pound’s strength. • The US Dollar Index stabilizes around 108.70, supported by stronger-than-expected ISM Manufacturing PMI data, which influences the movement of GBP/USD. • Investor sentiment remains fragile as traders monitor geopolitical developments, including Trump’s tariff policies and global risk-on sentiment shifts affecting currency markets. GBP/USD remains steady above 1.2400 as traders closely monitor key developments, including the impact of US tariffs on China and upcoming trade negotiations. The Pound is under pressure as the market expects the Bank of England to cut interest rates by 25 basis points to 4.5% on Thursday, which will be dovish in nature as inflation slows down. The US Dollar Index stabilizes around 108.70, supported by stronger-than-expected ISM Manufacturing PMI data. Market volatility persists as investors assess geopolitical risks, particularly Trump’s shifting tariff policies and global risk sentiment, which could influence the currency pair’s movement in the coming sessions. GBP/USD stays above 1.2400 as traders monitor US-China tariff developments and the Bank of England’s expected rate cut. The US Dollar stabilizes around 108.70, supported by strong economic data, while market volatility remains high amid shifting global risk sentiment. •The pair trades at 1.2430 while supported by improvement in risk sentiments and tariff negotiation. • The 10 percent tariff on China comes into place, and crucial trade talks will be seen over the next 24 hours • The Pound is likely to be weighed as the Bank of England is poised to cut 25 basis points interest rate at 4.5 percent by Thursday • The US dollar index is now trading around 108.70, supported by stronger-than-expected ISM Manufacturing PMI data. • Trump delayed tariffs for a minimum of 30 days due to border security commitments from both countries. • Uncertainty over trade policies, economic data, and political events keeps investors nervous. • Rising wage growth in the UK might become another factor by moving forward future BoE policy decisions as inflation is slowing. GBP/USD hovers at 1.2430 just above 1.2400, though traders continue to be vigilant about the fast-moving global trade changes and shifts in monetary policies in the world. The market is cautious as the US-China tariff tension is still a concern, although the 10% across-the-board tariff would be implemented, and trade talk between the two nations may play a role in currency movement. Meanwhile, interest rate cuts from the Bank of England are seen to be trimmed by 25 basis points on Thursday to 4.5%, which reflects a dovish tone due to slowing inflation. This may pull down the Pound. GBP/USD Daily Chart TradingView Prepared by ELLYANA US Dollar Index stabilizes at around 108.70 with ISM Manufacturing PMI higher than anticipated, coming at 50.9 for January, while attention to Trump postponing tariffs against Mexico and Canada for 30 days also lowered the immediate impact of trade war. These happenings do not make market sentiment stabilize; geopolitical risks, economic data, and central bank policies keep on bringing in a fluctuation in the value of GBP/USD over the coming sessions. TECHNICAL ANALYSIS GBP/USD is still above 1.2400 and has shown strength against global uncertainty, with mixed signals from technical indicators. The pair is currently trading near 1.2430, where it is testing the 50-day moving average as a major support level. A sustained move above 1.2450 could push the pair towards the psychological resistance of 1.2500, while a break below 1.2400 may expose the support at 1.2350. The Relative Strength Index is seen hovering near the neutral 50 level, thus showing a lack of strong momentum in either direction. The Moving Average Convergence Divergence remains flat and reflects indecision in market sentiment. Price action around these levels will be carefully watched, as further volatility can be expected before the BoE rate decision and US-China trade developments. FORECAST If GBP/USD can overcome the 1.2450 resistance level, which is backed by positive risk appetite and a soft US Dollar, its rallies are likely to continue. In case of the pair’s successful clearance of this point, the next one to be watched at the level of 1.2500 will be a psychological one that will attract higher buying. A bullish breakout above this point may send the currency higher through 1.2550 and 1.2600 within the short term. Positive news from the US-China trade talks or more hawkish-than-expected rate decision by the Bank of England can be helpful for the Pound to go upward. Also, if US data is disappointing and the Federal Reserve hints at its dovish sentiment, then further weakness in US Dollar will aid GBP/USD. Downward, the former remains susceptible at the support region of 1.2400, which now becomes the very next important zone of support lies at 1.2350. A break below this level can push the prices further down, toward 1.2300 and 1.2250, as pressure mounts in the market due to concerns over the UK economy, and the Bank of England considering a rate cut. If it becomes more dovish or talks about more rate cuts in future, the pound may face some more selling pressures. Escalating US-China trade tensions or continued strong US economic data may also see USD regain some strength

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Currencies EUR/USD

EUR/USD Slides Down to Almost 1.0370 Amid Low German Inflation and Trump’s Threat of New Tariffs

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  • January 31, 2025
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EUR/USD has slid to almost 1.0370 as low inflation data in six German states increases the prospects for further ECB easing. ECB President Christine Lagarde expressed confidence that inflation can be controlled, and the possibility of future rate cuts remains open. Meanwhile, former U.S. President Donald Trump’s threat to impose 100% tariffs on BRICS nations and 25% on Mexico and Canada has made the U.S. Dollar strong, putting additional pressure on EUR/USD to move downwards. The Fed decision to hold interest rates steady and the release of U.S. PCE inflation data will determine market sentiment going forward. Major support lies at 1.0266 and 1.0177 while resistance lies at 1.0630. KEY LOOKOUTS • Soft inflation in six German states raises expectations of further ECB rate cuts, weakening the Euro and pressuring EUR/USD downward. • Donald Trump’s proposed 100% tariffs on BRICS and 25% on Mexico and Canada boost USD strength, adding bearish momentum to EUR/USD. • The Fed’s decision to maintain interest rates signals a cautious approach, awaiting inflation and labor market changes before considering policy shifts. • The upcoming U.S. core PCE inflation report will guide the next move for the USD, influencing EUR/USD’s direction in the near term. EUR/USD remains under pressure as multiple factors drive market sentiment. The Euro weakened after softer-than-expected inflation data from six German states reinforced expectations of further ECB rate cuts. Meanwhile, former U.S. President Donald Trump’s aggressive tariff threats against BRICS, Mexico, and Canada have strengthened the U.S. The Euro is not so attractive compared to the Dollar. The decision by the Federal Reserve to hold the interest rate steady, expecting stronger inflation signals or labor market weakness, continues to support the Greenback. Investors are watching closely for U.S. core PCE inflation data, which will determine the next major move for EUR/USD. EUR/USD continues to slide as weak German inflation data further fuels ECB rate cut expectations while Trump’s tariff threats boost the U.S. Dollar’s strength. The cautious Fed and next week’s U.S. core PCE inflation data will play a key role in determining where the pair will go next. • The pair has slid down to near 1.0370 as weak German inflation data fuels expectations of ECB rate cuts. • Softer-than-expected CPI data from six German states signals easing price pressures, supporting ECB’s dovish stance. • Donald Trump’s proposed 100% tariffs on BRICS and 25% on Mexico and Canada strengthen the U.S. Dollar, adding downward pressure on EUR/USD. • Christine Lagarde emphasized a cautious approach, keeping the door open for further rate cuts as inflation nears the 2% target. • The Federal Reserve has maintained interest rates unchanged, awaiting stronger inflation signals or changes in the labor market before adjusting. • The U.S. Dollar Index (DXY) remains strong at around 108.20, which is limiting EUR/USD’s attempts to recover. • Traders are waiting for the U.S. core PCE inflation report, which may fuel further movements in EUR/USD. EUR/USD remains under selling pressure, dropping to around 1.0370 as lower-than-forecast inflation in six German states strengthens the case for more ECB rate cuts. ECB President Christine Lagarde’s latest statements indicate that she is optimistic about taming inflation but still leaves room for future easing. With inflation in the Eurozone easing, the central bank could become more accommodative in the near term. Former U.S. President Donald Trump has taken the threats against BRICS countries to placing 100% tariffs on them and 25% on Mexico and Canada, which makes the U.S. Dollar a better safe-haven asset in a time of increased world uncertainty. EUR/USD Daily Chart TradingView Prepared by ELLYANA The new decisions taken from the Federal Reserve after the interest rates remained unchanged help boost the U.S. Dollar’s strength would continue as the central bank remains in a wait-and-watch mode until they see clear signs of inflation or labor market shifts. Market participants are awaiting the next U.S. core PCE inflation data, which may be crucial to determine EUR/USD’s future moves. Stronger-than-expected inflation reading may strengthen the Fed’s higher-for-longer stance, pushing the U.S. dollar higher and keeping pressures on the Euro. On the technical front, EUR/USD faces key support at 1.0266 and resistance at 1.0630, which will determine a volatile trading session in the next hours of the session. TECHNICAL ANALYSIS EUR/USD has maintained bearish pressure and remains below the 20-day Exponential Moving Average (EMA) at 1.0390, though just barely above the 50-day EMA at 1.0449. This pair fails to maintain a recovery; selling interest continues, and supports are found on the downside at 1.0266 – the low for January 20 – and at 1.0177 – the low for January 13. The upside is capped by the high on December 6 at 1.0630. The RSI is under 60 in the 14-day measure; the recovery attempt was weak. Failure by EUR/USD to reiterate the uptrend above 1.0449 will increase prospects for a fall towards 1.0200. FORECAST Upward EUR/USD could be regained if future releases of the country’s HICP in Eurozone and the U.S core PCE inflation are beyond anticipations. Improved inflation data may ease concerns on the possibility of aggressive cuts on ECB’s rate, thereby, increasing demand for the Euro currency. The second aspect is if the Federal Reserve gives signals about being concerned about slowing economic growth or a softening labor market. This might weaken the U.S. Dollar and support a rebound in EUR/USD. Technically, if the price breaks above the 50-day EMA at 1.0449, renewed bullish momentum is expected. Next resistance levels would be around 1.0500 and 1.0630. Continued buying above these levels would drive the pair towards 1.0700 in the short term. Weak German inflation data, along with dovish tone of ECB, are on the other side weighing sentiment, so EUR/USD is vulnerable. The U.S. Dollar might take more strength, if the inflation data of U.S. also comes out to be strong enough, strengthening Fed’s higher-for-longer interest rate stance. A failure to stay above the 1.0370 level may open the door for further losses, with key support at 1.0266, then the January 13

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Currencies NZD/USD

NZDUSD Price Forecast: Bearish Bias Remains Intact Stagnating Below 0.5900

NZDUSD Price Forecast: Bearish Bias Remains Intact Stagnating Below 0.5900 The New Zealand Dollar (NZD) against the US Dollar (USD) on Wednesday faces mounting downward pressure as it breaks its three-day winning streak and traded to around the 0.5890 level in the European session Wednesday. The NZD/USD pair sits in a descending channel, with further bearish bias looking possible unless strong reversal is seen. Pair shows weakness, especially below key 0.5900, and short-term momentum remains bearish. Bearish Momentum: NZD/USD in a Descending Channel From the daily NZD/USD chart, a bearish outlook seems to be of concern for the bullish traders because the chart seems to be moving in a downward trend within a well-defined descending channel. A bearish sentiment usually prevails when the market is entering a kind of downtrend, as the pair cannot keep its course upwards but falls backwards. In the case of NZD/USD, this kind of pattern grows clearer because, day by day, it remains trading below both nine-day and 14-day EMAs. Currently, the nine-day EMA sits below the 14-day EMA, which is an important short-term indicator of price momentum and displays persistent weakness in the market. This means that bearish control is most likely to continue until a strong catalyst forces a directional shift in sentiment. The Relative Strength Index (RSI) – the measure of the speed and change of price movements – is also sitting below the neutral 50 level. When the RSI is constantly under 50, it usually means the market tends to have a bearish look, which commensurate with current trends for NZD/USD. Resistance Levels: Immediate Hurdles for NZD/USD Resistance levels for NZD/USD, however, are found in the immediate upside. The first level of key resistance is currently sitting at 0.5907, at the nine-day EMA. This represents the zone that sellers will be keenly watching for as a potential turning point. A break back above the nine-day EMA would be a marked shift in sentiment, though as of now, the pair sits below this resistance, which continues to support the bearish view. Above the nine-day EMA, the next level of resistance is at the 14-day EMA, which stands at 0.5926. This is a more important resistance level since it coincides with the upper boundary of the descending channel. From the breakout above the 14-day EMA and the upper boundary of the channel, the bearish momentum could be weakening, allowing the pair to further advance toward higher levels, even reaching the psychological level 0.6000. Given the current bearish momentum, however, such a breakout seems less likely over the short run unless something fundamental in market sentiment were to shift. NZD/USD Daily Price Chart Source: TradingView, prepared by Richard Miles Levels of Support : 0.5850 and the Lower Boundary of the Channel On the downside, the NZD/USD pair is facing potential support around the 0.5850 level, which represents a psychological level for the pair. If the price continues to slide lower, this support zone will be critical in determining whether the bearish trend will extend further. If the price breaks below 0.5850, the next level of support is likely to be the lower boundary of the descending channel, which is found around the 0.5930 region. The zone is of high importance situated around 0.5850 as it is a throwback support zone – a term used to describe a price zone where the market had previously shown support or resistance. If the NZD/USD pair can remain above the 0.5850 zone, it might be a good place for a reversal or at least a consolidation. On the other hand, if the price breaks decisively below that level, it would endorse the bearish view and push the pair down even further. Downside Risk: Testing the Two-Year Low at 0.5772 If the NZD/USD fails to maintain strength above 0.5850 and breaks below the lower boundary of its falling channel, critical support will be found at the two-year low at 0.5772. It reached the level last in November 2023, and this will be a signal for another decline in the value of the Kiwi versus the US Dollar, should the pair continue to the mentioned level. Such a move towards this level would squeeze the bearish sentiment and thus attract more selling pressure with further declines. Traders will be keenly watching how the price reacts to the lower boundary of the channel and the 0.5850 support. A break below these levels could potentially accelerate the decline and bring the pair closer to the two-year low of 0.5772. On the other hand, a failure to break below these levels might indicate a temporary consolidation, but the overall market sentiment would remain cautious and bearish. What Could Reverse the Bearish Trend? While the current outlook for NZD/USD remains bearish, it’s essential to consider potential catalysts that could reverse the trend. For instance, if there were a significant shift in market sentiment towards riskier assets or a sudden change in global economic conditions, it could provide support for the New Zealand Dollar. Positive economic data from New Zealand or a change in the US Federal Reserve’s policy stance could also impact the NZD/USD pair. Furthermore, if the pair breaks above the nine-day and 14-day EMAs, it could signal that the bears are losing control, allowing for a move higher. This scenario however, looks unlikely to come to pass without a significant fundamental trigger, as the current market sentiment is on further weakness for the Kiwi. What to Expect for NZD/USD Short-term view: The outlook for NZD/USD remains bearish, but the price was unable to stay above the key level of 0.5900. The pattern of the descending channel suggests further downside, with the support areas around 0.5850 and the lower boundary of the channel being areas to watch. A break below these levels would further solidify a strong bearish case, with a view toward reaching the two-year low of 0.5772. On the positive side, two important barriers that one needs to watch are resistance levels at the nine-day EMA (0.5907) and at the

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