Nzdusd drops amid us housing market slowdown and economic data signals

NZDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.55%	-31.3 Pips
Week to-date	-0.7%	-40.3 Pips
February	1.08%	61.1 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In the United States, January’s New-Home Sales Change experienced a significant drop, falling to -10.5% from a revised increase of 8.1% reported in the previous month, which was initially recorded as 3.6%. This drastic decline indicates a slowdown in the housing market, reflecting potential buyer hesitancy or affordability issues. Additionally, the U.S. House Price Index for December saw no change from November, remaining at a growth rate of 0.4% according to the Federal Housing Finance Agency (FHFA). This stagnation in house price growth could signal a cooling in the housing market.

The recent economic indicators from the U.S. suggest a deceleration in housing market activity, which is crucial as it contributes significantly to the overall economy. The upcoming high-impact events, such as the GDP annual rate announcement and the PCE Price Index excluding food and energy, could potentially provide further insights into the health of the U.S. economy. These events will be closely monitored by investors and could influence market perceptions and sentiment substantially.

The recent economic updates from the U.S. likely impacted the NZDUSD exchange rate, as the pair saw a -0.55% drop to 0.56920. The negative news in the U.S. housing sector can weigh on the U.S. dollar if it signals broader economic weaknesses, which would typically benefit the NZDUSD as a result of the dollar’s potential weakening. However, the drop in NZDUSD indicates other factors are also affecting the currency pair. If upcoming U.S. economic data, like GDP and PCE, paint a stronger economic outlook, it might mitigate the dollar’s losses, but if weaknesses persist, the NZ dollar could see some relief. The reaction to these announcements will be crucial in determining the next movement of the NZDUSD pair.

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What can we expect from NZDUSD today?

NZDUSD on Wednesday dropped -0.55% to 0.56920. Price is below 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 0.56757 with break below could see further selling pressure towards S2 at 0.56594. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.57325 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.56878 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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