Nzdusd rises 0.34% amid mixed US housing data and New Zealand rate cut

NZDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.34%	19.1 Pips
Week to-date	-0.5%	-28.8 Pips
February	1.2%	67.8 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, the housing market showed a mixed performance in January. The Building Permits saw a marginal increase to 1.483 million from a revised 1.482 million in the previous month, as reported by the Census Bureau. This slight rise indicates a stable outlook for future construction activities. However, the Housing Starts decreased to 1.366 million from the revised December figure of 1.515 million, suggesting a temporary slowdown in new residential construction activities. On a more optimistic note, the New York Empire State Manufacturing Index experienced a significant jump in February, climbing to 5.7 points from -12.6 points in January, mark a robust recovery in the manufacturing sector and potential strength in economic activities.

In New Zealand, economic indicators show a deceleration in some areas. The Reserve Bank of New Zealand revealed a cut in the Official Cash Rate, dropping it to 3.75% from the previous 4.25%, reflecting a monetary policy shift towards supporting economic activity and mitigating potential economic slowdowns. Additionally, the Producer Price Index – Output for the fourth quarter registered a decrease, moving to -0.1% from 1.5% in the third quarter, as per Stats NZ. This decline suggests decreasing production costs or potential weakness in the pricing power of producers, signaling subdued demand or efforts to stimulate consumption and investment.

Considering these developments, the NZDUSD pair’s movements are influenced by both U.S. and New Zealand’s economic conditions. The strengthening U.S. manufacturing data and stable building permits contrast with the decrease in housing starts, indicating a mixed but generally stable economic outlook in the U.S., which could provide moderate support to the USD. Meanwhile, New Zealand’s interest rate cut and fall in the Producer Price Index indicate economic easing, which could exert downward pressure on NZD. However, the interest rate cut might also be perceived positively as a proactive stance against economic slowdown, potentially attracting investments. As a result, the NZDUSD pair, which rose 0.34% to 0.57042, is currently in consolidation, waiting for clearer cues from economic data and policy announcements to determine its future path.

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What can we expect from NZDUSD today?

NZDUSD on Wednesday rose 0.34% to 0.57042. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.5677 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.57320 or trades above daily pivot 0.57045. Break above could target R1 at 0.57317. While to the downside, we are looking at 0.5677 (S1) and daily low of 0.56773 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A break above 0.57320 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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