Nzdusd rises amid declining New York Empire State Manufacturing Index, mixed implications for U.S. economy

NZDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.06%	3.7 Pips
Week to-date	0.05%	3.1 Pips
December	-2%	-118 Pips

Upcoming key events (London Time)

Tue 01:30 PM USD Monthly Retail Trade (1-mth)
Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM USD Interest Rate Projections
Wed 09:45 PM NZD GDP (3-mth) | Q3

What happened lately

The United States’ New York Empire State Manufacturing Index experienced a significant decline in December, plummeting to 0.2 points from a robust 31.2 points recorded in November. This index, which is a key indicator of manufacturing activity in New York, is often regarded as reflective of broader manufacturing and economic health. A drastic decrease such as this signals a slowdown in manufacturing activities, potentially pointing to weakening demand or operational challenges within the manufacturing sector. The report by the New York Fed highlights a stark contrast in manufacturing sentiment, suggesting a potential cooling down of economic momentum as the year draws to a close.

For the NZDUSD currency pair, the news of a drop in the Empire State Manufacturing Index has mixed implications. As the manufacturing index is indicative of U.S. economic health, the significant plunge may contribute to concerns over economic slowdown, possibly resulting in reduced capital inflows into the U.S. economy. Such a perception can weaken the U.S. Dollar, thereby providing support for other currencies like the New Zealand Dollar against it. This condition likely contributed to the minor rise of the NZDUSD by 0.06% to 0.57787 on Monday. However, market participants should brace for further volatility, with upcoming high-impact economic events, including the U.S. Monthly Retail Trade data and Federal Reserve meetings on interest rates, likely to influence currency movements. Additionally, New Zealand’s GDP figures will be particularly noteworthy, as better-than-expected data could provide further bullish momentum for the NZDUSD. Nonetheless, it is crucial to monitor these developments closely, as any hawkish stance from the Fed regarding interest rates could offset current gains by strengthening the USD.

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What can we expect from NZDUSD today?

NZDUSD on Monday rose 0.06% to 0.57787. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for NZDUSD looks bullish as the pair ended higher after Monday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.57905 with break above could target R2 at 0.58022 or figure level area. While towards the downside, we are looking at daily low of 0.57584 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.57862 may suggest continuation after recent positive movement.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out:

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