The New Zealand Dollar (NZD) is on a winning streak, gaining ground for the third consecutive day in early Asian trading on Tuesday. The positive risk sentiment in global markets, coupled with easing geopolitical tensions in the Middle East, is putting pressure on the US Dollar and lifting the NZD/USD pair. However, investors are keeping a close watch on the upcoming rate decision from the People’s Bank of China (PBoC) and scheduled speeches from Federal Reserve officials later in the day.
Market Update: NZD Strengthens Amid USD Weakness
- New Zealand’s Trade Balance for July came in at NZD $-9.29B YoY, slightly better than the previous reading of $-9.5B.
- Exports decreased to $6.15B in July, while Imports rose to $7.11B compared to the previous month.
- Fed officials Neel Kashkari and Austan Goolsbee hint at potential US interest rate cuts in September, citing concerns about the labor market and economic overheating.
- Market expectations indicate a 77% chance of a 25 bps Fed rate cut in the upcoming September meeting.
Technical Analysis: NZD/USD Resumes Bullish Trend
The NZD/USD pair is trending higher, breaking above a key resistance level on the daily chart. With the 14-day RSI indicating bullish momentum and price action above the 100-day EMA, buyers are in control. A move above the psychological level of 0.6100 could open the doors to further gains towards 0.6154 and 0.6222. On the downside, support is seen at 0.6050 and 0.5974, with a break below signaling a potential decline to 0.5846.
Analysis and Conclusion
The recent strength in the New Zealand Dollar can be attributed to positive market sentiment, geopolitical developments, and dovish comments from the RBNZ. As investors await key economic data releases and central bank decisions, the NZD is likely to remain volatile. Traders should monitor technical levels and upcoming events to capitalize on potential trading opportunities in the NZD/USD pair.