NZDUSD Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | 0.62% | 35.2 Pips |  |
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| Week to-date | 1.56% | 86.9 Pips | |
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| January | 0.61% | 34.5 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
New Zealand’s Consumer Price Index (CPI) inflation rate for the fourth quarter (Q4) remained steady at 2.2%, the same level recorded in the third quarter (Q3), as reported by Stats NZ. This consistency in annual CPI inflation suggests that overall price increases have stabilized, providing a level of predictability for businesses and consumers alike. However, looking at the quarterly CPI inflation rate, there was a slight decline to 0.5% in Q4 from 0.6% in Q3. This drop in the quarterly index may indicate a subtle easing in price pressures within the quarter, suggesting that inflation, at least for this period, isn’t accelerating further. These figures indicate a stable inflation environment in New Zealand, with annual inflation maintaining its course, yet showing some signs of quarterly moderation.
Regarding the NZDUSD currency pair, the stable inflation figures, coupled with the slight decrease in quarterly CPI, might influence the currency exchange rate in a couple of ways. Firstly, the steadiness in the annual CPI rate may offer the New Zealand central bank some leeway to maintain or adjust its monetary policy without the immediate pressure to combat either rapidly rising or falling inflation. This could contribute to a perception of stability around the New Zealand dollar, providing confidence to investors. Secondly, the NZDUSD gained 0.62% to trade at 0.56744, indicating a strengthening of the New Zealand dollar against the US dollar. Given there are no major economic events expected, this trend could be a reflection of recent market dynamics reacting to the inflation data, reinforcing any trends based on existing market sentiments rather than being influenced by new economic indicators. As such, the NZDUSD exchange rate may continue to experience consolidation with moderate volatility unless new data or developments arise. Overall, the stable inflation rate supports a stable economic outlook, which could underpin the New Zealand dollar’s performance in the forex market.
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What can we expect from NZDUSD today?
NZDUSD on Tuesday rose 0.62% to 0.56744. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.56307 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.56890 or trades above daily pivot 0.56599. Break above could target R1 at 0.57035. While to the downside, we are looking at 0.56307 (S1) and daily low of 0.56162 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A break above 0.56890 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:
| R3 | 0.57763 |
| R2 | 0.57327 |
| R1 | 0.57035 |
| Daily Pivot | 0.56599 |
| S1 | 0.56307 |
| S2 | 0.55871 |
| S3 | 0.55579 |
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