NZDUSD Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | -0.65% | -38.6 Pips |  |
||
| Week to-date | -0.73% | -43.3 Pips |  |
||
| November | -0.81% | -48.5 Pips | |
||
Upcoming key events (London Time)
Wed 01:30 PM USD CPI Inflation Rate (12-mth) Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth) Thu 08:00 PM USD Federal Reserve Chair Jerome Powell speech
What happened lately
In New Zealand, the Reserve Bank of New Zealand reported an increase in their Survey of Inflation Expectations for the fourth quarter, rising from 2.03% in the previous quarter to 2.12%. This indicates that businesses and consumers anticipate higher inflation in the future, reflecting possible upward pressure on prices in the coming months. An inflation expectation that exceeds the mid-point of the central bank’s target could influence the RBNZ’s monetary policy, potentially leading to tighter financial conditions should inflation continue to rise. As inflation expectations are closely watched by policymakers, the trajectory of such data can impact interest rate decisions.
Meanwhile, in the United States, there are several significant economic events scheduled that could affect market dynamics. On Wednesday at 1:30 PM, the Consumer Price Index (CPI) inflation rate is set to be released, providing insights into the inflation landscape over the past twelve months. Following this, on Thursday at 1:30 PM, the Producer Price Index (PPI), excluding food and energy, will be published. This metric gives a deeper view into the cost pressures at the producer level. Moreover, at 8:00 PM on Thursday, the Federal Reserve Chair, Jerome Powell, is scheduled to deliver a speech. His remarks are of particular interest to markets, as they can offer clues regarding the future direction of monetary policy, especially given recent inflationary trends.
The current economic news from New Zealand, revealing rising inflation expectations, initially seems set to support a stronger NZD as it implies potential for interest rate increases by the RBNZ. However, NZDUSD experienced a decline of 0.65% to 0.59230 on Tuesday. This movement can be attributed to the anticipation of upcoming US economic data and statements by Federal Reserve Chair Jerome Powell. If the US inflation rate comes in high, or if Powell signals a hawkish turn, indicating the possibility of further interest rate hikes, the USD may strengthen relative to the NZD. As markets await these outcomes, the pressure on NZDUSD reflects concerns over divergent monetary policies where aggressive tightening by the Fed could overshadow the external inflationary pressures faced by New Zealand.
Latest from X (Twitter)
What can we expect from NZDUSD today?
NZDUSD on Tuesday dropped -0.65% to 0.59230. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for NZDUSD looks bearish as the pair posted lower in Tuesday trading session.
Looking ahead for the day, immediate support level is at S1 0.58972 with break below could see further selling pressure towards S2 at 0.58715. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.59723 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.59090 would indicate selling pressure.
For the week to-date, take note that NZDUSD is mixed as compared to the prior week.
Key levels to watch out:
| R3 | 0.60238 |
| R2 | 0.59981 |
| R1 | 0.59605 |
| Daily Pivot | 0.59348 |
| S1 | 0.58972 |
| S2 | 0.58715 |
| S3 | 0.58339 |
#NZDUSD Trending on Twitter
[custom-twitter-feeds hashtag=”#NZDUSD” num=3 showheader=false]