Nzdusd falls as consumer confidence drops and mixed US data emerges

NZDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.64%	-36.1 Pips
Week to-date	-1.16%	-65.9 Pips
January	-0.24%	-13.3 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In New Zealand, consumer confidence as measured by ANZ – Roy Morgan Consumer Confidence Index experienced a drop from 100.2 points in December to 96 points in January. This decline suggests a decreased level of optimism regarding economic conditions among consumers. However, New Zealand’s trade data for December showed a positive trend, with exports rising to $6.84 billion from November’s $6.42 billion and imports decreasing to $6.62 billion from $6.92 billion in the previous month. Consequently, the trade balance improved from November’s deficit of $8.26 billion to a deficit of $7.67 billion in December.

In the United States, the economic data painted a mixed picture. The U.S. economy showed some slowing down as indicated by the flash estimate of the GDP annual rate, which decreased from 3.1% in Q3 to 2.3% in Q4. Additionally, the pending home sales showed a significant decline, with December figures dropping to -5.5% from a revised 1.6% in November. On a brighter note, the labor market data was favorable, with initial unemployment claims falling to 207,000 from 223,000 as of the week ending January 25. Moreover, the Personal Consumption Expenditures (PCE) excluding food and energy prices increased to 2.5% in Q4 from 2.2% in Q3, and the PCE price index rose to 2.3% from 1.5% in Q3. The Federal Reserve maintained the interest rate at 4.5%, signaling stability in monetary policy.

For the NZDUSD currency pair, the decline in New Zealand consumer confidence coupled with improvements in trade balance creates a complex impact. The negative sentiment from consumer confidence could weigh on the NZD, while the improved trade balance might provide some support. On the U.S side, slower GDP growth and declining pending home sales could exert downward pressure on the USD. Nonetheless, the upbeat labor market figures and slightly higher inflation may counteract this effect. Consequently, the combination of these factors contributed to the decline of NZDUSD by 0.64% to 0.56261 on Thursday, with the overall sentiment tending to favor the USD, considering the current macroeconomic indicators.

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What can we expect from NZDUSD today?

NZDUSD on Thursday dropped -0.64% to 0.56261. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at S1 0.56091 with break below could see further selling pressure towards S2 at 0.5592. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.56674 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.56212 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:

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