The NZD/USD pair has seen a swift recovery from 0.5910 as the US Dollar corrects its course. This correction comes after mixed US S&P flash PMI data for July, which has weakened the US Dollar against major currencies. Additionally, China’s bleak economic outlook and increased RBNZ rate-cut bets have added pressure on the New Zealand Dollar.
Despite the recent bounce back in the Kiwi asset, its near-term outlook remains vulnerable due to negative closings against the US Dollar in the past four trading sessions. Speculation of early rate cuts by the Reserve Bank of New Zealand has grown, driven by easing price pressures and slower inflationary growth.
The technical analysis shows that the NZD/USD pair may find support near the trendline around 0.5900, with a bearish trend indicated by the declining 20-day EMA and the RSI entering the bearish range. A break below 0.5850 could lead to further downside towards 0.5800 and 0.5770 levels.
On the flip side, a move above 0.6000 could shift the trend towards the upside, targeting levels at 0.6046 and 0.6100.
NZD/USD daily chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is influenced by various factors such as the health of the New Zealand economy, RBNZ policy, Chinese economic performance, and dairy prices. Understanding these factors can help investors make informed decisions regarding the NZD.
Analysis: The recent recovery in the NZD/USD pair is driven by US Dollar correction and mixed economic data. However, the Kiwi asset remains vulnerable due to speculation of RBNZ rate cuts and China’s economic woes. Investors should monitor key levels and indicators to assess potential entry and exit points in the currency pair.